Publications

Our consultants are renowned speakers, experts and authors. A selection of current publications in the relevant literature, presentations and opinion pieces can be found on this page.

Publication

Smoothing Time Fixed Effects
July 2020

Goesser N., N. Moshgbar, Smoothing Time Fixed Effeckts, DICE Discussion Paper No. 343, July 2020.

Abstract

Controlling for time fixed effects in analyses on longitudinal data by means of time-dummy variables has long been a standard tool in every applied econometrician’s toolbox. In order to obtain unbiased estimates, time fixed effects are typically put forward to control for macroeconomic shocks and are (almost) automatically implemented when longitudinal data are analyzed. The applied econometrician’s toolbox contains however no standard method to control for time fixed effects when time-dummy variables are not applicable. A number of empirical applications are crucially concerned with both suffering from bias due to omitting time and time-dummies being inapplicable. This paper introduces a simple and readily available parametric approach to approximate time fixed effects in case time dummy variables are not applicable. Applying Monte Carlo simulations, we show that under certain regulatory conditions, trend polynomials (smoothing time fixed effects) yield consistent estimates by controlling for time fixed effects, also in cases time-dummy variables are inapplicable. As the introduced approach implies testing nested hypotheses, a standard testing procedure enables the identification of the order of the trend polynomial. Applications that may considerably suffer from bias in case time fixed effects are neglected are among others cartel overcharge estimations, merger and regulation analyses and analyses of economic and financial crises. These applications typically divide time into event and control periods, such that standard time dummies may not be applicable due to perfect multicollinearity. In turn, their estimates of interest most crucially need to be purged from other (unobserved) time dependent factors to be consistent as time may by construction induce omitted-variable bias.

Publication

Public Procurement of Innovation: Evidence from a German Legislative Reform
July 2020

Czarnitzki, D., P. Hünermund und N. Moshgbar, International Journal of Industrial Organization, Volume 71, July 2020, 102620.

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Opinion

State at the Controls
11. Juni 2020

The Corona crisis has led to an almost complete collapse of aviation. The state helps Lufthansa with billions of euros and becomes the owner of the company with 20 percent. When and where is a state entry justified? And how do you get rid of the state? DICE Consult Partner Prof. Dr. Justus Haucap together with the Chairman of the Monopolies Commission, Prof. Dr. Achim Wambach, reflected on answers in the Frankfurter Allgemeine Zeitung (FAZ).

To the article

Publication

A Note on the Sale of Thyssenkrupp’s Elevator and Escalator Business
February 2020

Haucap, J., C. Kehder

In May 2019, first press reports emerged that Thyssenkrupp AG may potentially sell parts of its elevator division, which produces both elevators and escalators. In early September 2019, Thyssenkrupp AG announced that it also considers the option to sell the entire elevator division as a whole. Kone Corporation, a major player in the elevator and escalator industry (“E&E industry”), has publicly signalled its interest in an acquisition. The Company further signalled that in case of a successful bid it would divest the complete European elevator business of Thyssenkrupp to the private equity firm CVC for antitrust reasons. Several other buyout groups compete with Kone without facing similar antitrust issues. We use the “battle for Thyssenkrupp’s crown jewel” as an opportunity to discuss competitive effects of mergers in highly concentrated markets.

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Meinung

Interview with Justus Haucap at "Who's Who Legal"
Februar 2020

DICE Consult Partner Prof. Dr. Justus Haucap talks in an interview with the legal network "Who's Who Legal" about the future of competition .
To the Interview

Publication

The Impact of Consumer Protection in the Digital Age: Evidence from the European Union.
January 2020

Haucap, J., U. Heimeshoff, A. Rösner, The Impact of Consumer Protection in the Digital Age: Evidence from the European Union, International Journal of Industrial Organization, forthcoming.

We investigate the effect of an EU-wide consumer protection regulation on consumer trust as well as consumer behavior. The Unfair Commercial Practice Directive (UCPD) was implemented by EU member states between 2007 and 2010. We utilize data from the Special and Flash Eurobarometer for the years between 2006 and 2014 and experts’ evaluation on consumer protection levels before the introduction of the regulation. This rich data set allows us to apply a difference-in-difference estimator with multiple time periods. We find a significant relationship between the introduction of the UCPD and consumer trust and cross-border purchases for countries with a low consumer protection level before the introduction of the UCPD. The relationship increases over time and stays then relatively constant.

Publication

The Platform Economy: New Competition Rules — Renaissance of Antitrust Control of the Abuse of Market Power
Januar 2020

Haucap, J. , Wirtschaftsdienst 100. Jahrgang, 2020, Heft 13, S. 20–29.

While digital platforms have intensifi ed competition in many markets, there is also a higher risk of market foreclosure due to the “winner takes all”-nature of these markets. Hence, there are good reasons for a strengthening of competition law, as now planned with Germany’s competition law reform. Focussing on the control of abuse of market power instead of merger control is well founded from an economic perspective, as a stricter control of abusive behaviour makes merger control less important. Strengthening merger control is difficult: While this could better address the problem of so-called killer acquisitions, it would also worsen the problem of GAFAM kill zones, which is equally relevant.

Publication

Recht und Ökonomie
Dezember 2019

Justus Haucap, Oliver Budzinski, Nomos Verlag, Baden-Baden.

Namhafte Autorinnen und Autoren von renommierten Universitäten und Institutionen analysieren in diesem Band das seit Jahrzehnten kontrovers diskutierte Verhältnis von Recht und Ökonomie aus verschiedenen Blickwinkeln und Disziplinen und widmen sich dabei aber aktuellen Themen.

Zunächst wird in Teil 1 des Werkes das Verhältnis von Recht und Ökonomie in zwei Grundlagenkapiteln je aus der Sicht der Rechtswissenschaften und der Wirtschaftswissenschaften betrachtet, bevor in Teil 2 einzelne Politikfelder in den Fokus rücken.

Wichtige Schwerpunkte sind die Staatsschuldenkrise, die Finanzmärkte, das Verkehrswesen, der Medien- und Telekommunikationssektor sowie das Medienrecht, das Patentrecht, das Kartellrecht und die Krankenhausreform 2015.

Das Werk ist Teil der Reihe Wettbewerb und Regulierung von Märkten und Unternehmen, Band 37.

Publikation

Modernizing the Law on Abuse of Market Power in the Digital Age
December 2019

J. Haucap, Kerber H., Schweitzer H., Welker R., CPI Antitrust Chronicle 12/2019, 2-9.

In 2018, the German Ministry of Economics and Energy commissioned a study on options for competition law reforms regarding the abuse of market power in digital markets. In this paper, the study’s authors summarize their analysis which had a major impact on Germany’s current competition law reform.

Publication

Competition in ambulatory medical care
Dezember 2019

Haucap J. , M. Coenen, in: Wettbewerb und Regulierung von Märkten und Unternehmen, Band 40, Nomos.

For 15 years, the ambulant medical sector has been systematically opened up more and more to hospitals. Hospitals and general practitioners are therefore increasingly in competition with each other, but often under unequal conditions with regard to demand planning, remuneration and investment financing. The resulting distortions of competition are analysed by the authors as examples for the fields of oncology, neurology and psychiatry and reform options are presented to reduce distortions of competition.

Publication

Transparenzdefizite beim kurz- und langfristigen Engpassmanagement der Übertragungsnetzbetreiber
November 2019

Haucap, J., Ch. Helle,I. Löbert, Oliver Raschka, Zeitschrift für Energiewirtschaft (2019), p. 1-14.

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Abstract
In the wake of the energy system transformation and the liberalisation of the electricity industry, transmission system operators (TSOs) have been given comprehensive powers and competences to ensure network and system security. These are capable of significantly affecting competition in markets that are upstream and downstream of the network. As system services increasingly have to be provided by TSOs, non-discriminatory implementation and the efficiency of the measures taken are becoming increasingly important in ensuring competition in the electricity industry. Transparency deficits that prevent a review of the measures taken by the TSOs and a discussion about possible changes in the market design should therefore be viewed critically, especially since the TSOs are regulated by the Federal Network Agency (BNetzA) and there must also be no unilateral discretion in the fulfilment of information obligations. The article shows the existing possibilities for TSOs to intervene in market developments, identifies existing transparency deficits and proposes solutions aimed at improving transparency.

Presentation

The Effects of Private Damage Claims on Cartel Stability: Experimental Evidence
September 2019

Normann, H.-T., 46th Annual Conference of the European Association for Research in Industrial Economics (EARIE), Barcelona, Spain.

Recently, private damage claims in cartel cases have gained attention and triggered a debate about potentially negative effects they may have on leniency, hitherto a prime tool to uncover cartels. Private damage claim actions can lead to a trade off between public and private enforcement and harm the attractiveness of leniency programs because whistleblowers only obtain no or only restricted protection against third-party damage claims. This may actually stabilize cartels. We run a repeated homogeneous-good Bertrand triopoly experiment to study this trade off. Firms can choose whether to join a cartel and may apply for leniency afterwards. Our design extends existing leniency experiments by adding a stage with possible private damages after a cartel has been uncovered (either through a whistleblower or by the cartel authority). We further investigate two communication formats. We compare unrestricted chat to the structured announcements (of “acceptable” prices or price ranges) the literature has focussed on. We find that the implementation of private damage claims decreases cartel formation but makes cartels more stable. The impact on consumer welfare depends on the form of communication.

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Veröffentlichung

Eine Bewertung der Rolle des Grenzschutzes auf die landwirtschaftlichen Betriebe in der Schweiz und ihre vorgelagerten Industrien
August 2019

Wey, C., N. Gösser, Eine Studie im Auftrag des Bundesamts für Landwirtschaft, Bern, Schweiz.

Link zur Studie

Zusammenfassung
Die Studie analysiert mittels eines wettbewerbsökonomischen Ansatzes die Auswirkungen des Grenzschutzes auf die landwirtschaftlichen Betriebe in der Schweiz und ihre vorgelagerten Produktionsstufen. Der Grenzschutz im Zusammenspiel mit den Direktzahlungen schafft eine Rente, die aber kaum bei den landwirtschaftlichen Betrieben verbleibt, sondern zu einem Großteil vorgelagerten Produktions bzw. Wertschöpfungsstufen zu Gute kommt. Zentrales Ziel ist es, die Gründe für diese asymmetrische Verteilung der Rente zwischen Landwirten und ihren vorgelagerten Produktionsstufen herauszuarbeiten.

Die Angebotsseite der Märkte der vorgelagerten Produktionsstufen weist oft eine hohe Konzentration auf, sodass ein wirksamer Wettbewerb nicht zu erwarten ist.1 Insbesondere existiert ein dominanter vertikal integrierter Marktakteur, der zudem auch auf den der Landwirtschaft nachgelagerten Stufen aktiv ist und als Genossenschaftsverband auftritt. Er akkumuliert damit Margen (Gewinne) über alle Stufen der landwirtschaftlichen Wertschöpfungskette, sodass er ein Hauptnutznießer des Grenzschutzregimes ist.

Eine Reihe von Indizien sprechen für ein gewinnorientiertes Verhalten des Genossenschaftsverbands. So werden viele Produktionsmittel aus unterschiedlichen Gründen zu erheblich höheren Preisen als in der EU verkauft und diverse Unternehmenszukäufe haben die Marktdominanz weiter ausgebaut. Das Ausmaß der Abschöpfung der Rente landwirtschaftlicher Betriebe durch die vorgelagerten Produktionsstufen wird nicht nur durch die hoch konzentrierte Angebotsstruktur begünstigt, sondern hängt auch kritisch vom Nachfrageverhalten der Landwirte ab. Diese Nachfrage kann vernünftigerweise als preisunelastisch unterstellt werden, was Preissteigerungen im hohen Maße profitabel macht. Der Grenzschutz schafft zudem nicht nur Renten, sondern stabilisiert die Marktverhältnisse durch zusätzliche Markteintrittsbarrieren und senkt zusammen mit den Direktzahlungen den Wettbewerbs- und Kostendruck auf die landwirtschaftlichen Betriebe, sodass diese bereit sind mehr für ihre Inputs zu bezahlen.

Statement

Europa braucht eine Antwort auf Chinas Industriepolitik
August 2019

Haucap, J., Frankfurter Allgemeine Zeitung.

Link to article

Publication

Competition and Competition Policy in a Data-Driven Economy
July/August 2019

Haucap, J., Intereconomics: Review of European Economic Policy, 54, 201-208.

Link to publication

Statement

Kartellrechtliche Missbrauchsaufsicht im digitalen Zeitalter
July 2019

Haucap, J., Global Mergers & Transactions, TLE-022-2019.

Link to publication

Publication

Territorial Supply Constraints: Impact on Consumer Welfare
July 2019

Kleemann, K., C. Wey, A Study for EuroCommerce.

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The aim of our study is to provide an economic analysis of the question how territorial supply constraints (TSCs) imposed by powerful brand manufacturers on retailers affect market outcomes in retail markets, in particular from a consumer point of view. TSCs are illegitimate restrictions imposed by suppliers of “must-have” products to restrict retailers’ and wholesalers’ ability to source centrally or in the country of their choice. TSCs are not justified on grounds of different consumer taste/preferences and/or national standards and regulations and constitute a cross-border trade barrier. This implies, “(…) that a retailer, based in one Member State and dealing with a multinational supplier is not given the choice to decide from which national entity of the supplier he would preferably source the desired products and is instead referred to a specific national subsidiary.” (European Commission, 2018b, p. 91). TSCs force retailers to source products domestically and/or prevent them from “parallel trading” products from another Member State. Thus, TSCs – besides to being economically undesirable – are basically illegitimate practices, as they infringe the Single Market rules by strongly limiting retailers’ freedom to choose their suppliers.

We focus on the food value chain but most of our analysis also applies to many non-food markets. In line with the Commission’s findings in its 2013-Green Paper, we show that TSCs segment markets to enable brand manufacturers to price discriminate between different countries. TSCs constitute a cross-border trade barrier for retailers resulting in different prices for the same products within the European Union. Our analysis of more sophisticated theories (of monopolistic and oligopolistic price discrimination and new product innovations, for instance) largely confirms that TSCs imposed by powerful manufacturers harm both market efficiency and final consumers. Our study includes a critical assessment of the RBB Economics study entitled “Territorial supply constraints: the economic arguments” published in April 2013 (in short: RBB study). The RBB study concludes that cross-country price differentials due to TSCs do not negatively affect consumers but – rather to the opposite – “reflect the efficient functioning of markets” (RBB, 2013, p. 2). As we will show, such a conclusion is not valid under a reasonable and fair interpretation of the relevant economic theory and taking available empirical evidence about patterns of price differentials of branded goods in Europe into account.

Presentation

Competition and Antitrust in the Digital Age
July 2019

Haucap, J., Conference of the German Law & Economics Association.

Link to conference

Publication

Screening instruments for monitoring market power - The Return on Withholding Capacity Index (RWC)
June 2019

Bataille, M., O. Bodnar., A. Steinmetz and S. Thorwarth, Energy Economics, 81, 227-237.

While markets have been liberalized all over the world, incumbents often still hold a dominant position, e.g. on energy markets. Thus, wholesale electricity markets are subject to market surveillance. Nevertheless, consolidated findings on abusive practices of market power and their cause and effect in these markets are scarce and non-controversial market monitoring practices fail to exist. Right now, the Residual Supply Index (RSI) is the most important instrument for market monitoring. However, a major drawback of this index is its focus on just one specific aspect of market power in wholesale electricity markets whereas different consequences of market power are possible. Hence, markets could be distorted in several ways and we propose the “Return on Withholding Capacity Index” (RWC) as a complementary index to the RSI. The index is a measure of the firms' incentive to withhold capacity. The benefits and practicability of the RWC are shown by an application on data for the German-Austrian electricity wholesale market in 2016.

Link to publication

Publication

Ökonomische Grundlagen der Anreizregulierung
June 2019

Coenen, M. and J. Haucap, in: B. Holznagel & R. Schütz (eds.), ARegR – Kommentar zum Anreizregulierungsrecht, 137-161, 2. edition, Verlag C.H. Beck: Munich.

Presentation

Kartellrechtliche Missbrauchsaufsicht in der digitalen Wirtschaft
June 2019

Haucap, J., Hamburg Tax and Legal Excellence, Local Lounge Hamburg.

Link to conference

Presentation

Anforderungen an die 10. GWB-Novelle
June 2019

Haucap, J., Working meeting of the Studienvereinigung Kartellrecht, Duesseldorf.

Link to program

Statement

Portoerhöhungen – Was da abläuft, ist schon eine Frechheit
May 2019

Haucap, J., Interview published in Die Welt (online).

Link to article

Presentation

Big Tech im Check: Wettbewerb um Daten und Chancengleichheit im Netz
May 2019

Haucap, J., Panel discussion, Media Convention Berlin.

Link to conference

Presentation

Macht, Markt und Wettbewerb: Was steuert die Datenökonomie?
May 2019

Haucap, J., Annual conference - North Rhine-Westphalian Acadamy of Sciences, Humanities and the Arts.

Link to conference

Presentation

Competition Issues in Online Markets
April 2019

Haucap, J., Annual conference 2019 - Royal Economic Society, University of Warwick, UK.

Link to conference

Presentation

Der E.ON/RWE-Deal aus wettbewerbsökonomischer Sicht
March 2019

Heimeshoff, U., enerminds Workshop der Enervis GmbH in Berlin.

Publication

How Mergers Affect Innovation: Theory and Evidence
March 2019

Haucap, J., A. Rasch and J. Stiebale, International Journal of Industrial Organization, 63, 283-325.

This article analyses how horizontal mergers affect innovation of the merged entity and its non-merging competitors. Using data on horizontal mergers among pharmaceutical firms in Europe and applying propensity score matching estimators, we find that average patenting and R&D of the merged entity and its rivals declines substantially in post-merger periods. We show that this result is consistent with the predictions from an oligopoly model with heterogeneous firms, as well as a patent race model, when pre-merger R&D intensity is sufficiently high. Consistent with our theoretical model, we find that negative effects of mergers on innovation are concentrated in markets with high R&D intensity and in technology classes with overlap in pre-merger innovation activities of merging and rival firms.

Link to publication

Publication

Data Protection and Antitrust: New Types of Abuse Cases? An Economist’s View in Light of the German Facebook Decision
February 2019

Haucap, J., CPI Antitrust Chronicle 2/2019, 1-7.

Link to publication

Report

Sharing Economy in Deutschland - Stellenwert und Regulierungsoptionen für Beherbergungsdienstleistungen
January 2019

Busch, C., V. Demary, B. Engels, Haucap, J., C. Kehder, I. Loebert and C. Rusche, Nomos, Baden-Baden.
Commissioned by the Federal Ministry for Economic Affairs and Energy (BMWi).

Das Wachstum der Sharing Economy birgt sowohl Chancen als auch Herausforderungen. Das Buch analysiert verschiedene Sektoren der Sharing Economy empirisch, mit einem Schwerpunkt auf dem Unterkunftssektor. Die Autoren erörtern Regulierungsoptionen und unterbreiten Vorschläge für Reallabore.

Link to publication

Publication

Collusion and Bargaining in Asymmetric Cournot Duopoly - An experiment
January 2019

Fischer, C. and H.-T. Normann, European Economic Review, 111, 360-379.

In asymmetric dilemma games without side payments, players face involved cooperation and bargaining problems. The maximization of joint profits is implausible, players disagree on the collusive action, and the outcome is often inefficient. For the example of a Cournot duopoly with asymmetric cost, we investigate experimentally how players cooperate (collude implicitly and explicitly), if at all, in such games. In our treatments without communication, players fail to cooperate and essentially play the static Nash equilibrium (consistent with previous results).

With communication, inefficient firms gain at the expense of efficient ones. When the role of the efficient firm is earned in a contest, the efficient firm earns higher profits than when this role is randomly allocated. Bargaining solutions do not satisfactorily predict outcomes.

Link to publication

Presentation

The Winner takes it all? Digitalisierung und neue Herausforderungen für die Wettbewerbspolitik
January 2019

Haucap, J., Ministry of Economic Affairs, Innovation, Digitalisation and Energy of the State of North Rhine-Westfalia.

Publication

Abgrenzung des Redispatch-Marktes
January 2019

Haucap, J., I. Loebert, S. Thorwarth, C. Helle and O. Raschka, Energiewirtschaftliche Tagesfragen (et), issue 1/2, 80-82.

Publication

Marktabgrenzung bei Stromerzeugung und Stromgroßhandel: Die Bedeutung von Redispatch-Märkten
October 2018

Haucap, J. and A. Pfannenschmidt, in: P. Rosin and A. Uhle (eds.), Recht und Energie: Liber amicorum für Ulrich Büdenbender zum 70. Geburtstag, 215-242, De Gruyter Oldenbourg: Berlin.

Link to publication

Report

Modernisierung der Missbrauchsaufsicht für marktmächtige Unternehmen
August 2018

Schweitzer, H., Haucap, J., W. Kerber and R. Welker, Wirtschaftsrecht und Wirtschaftspolitik, 297, Nomos Verlag.
Commissioned by the Federal Ministry for Economic Affairs and Energy (BMWi).

Die Entwicklungen in der digitalen Wirtschaft, darunter die zunehmende Bedeutung von Daten als kritischer Inputressource in Produktions- und Distributionsprozessen und von digitalen Plattformen, gehen mit neuartigen Wettbewerbsgefährdungen einher. Sie werfen die Frage auf, ob das geltende deutsche und europäische Kartellrecht gewappnet ist, diesen wirksam und rechtzeitig zu begegnen. Das Bundesministerium für Wirtschaft und Energie (BMWi) hat die Autoren beauftragt zu untersuchen, ob die kartellrechtlichen Regeln zum Schutz vor dem Missbrauch wirtschaftlicher Macht hinreichend klar und effektiv sind. Das Ergebnis dieser Untersuchung ist die vorliegende Studie, die vertiefte Analysen und Empfehlungen zum Reformbedarf der kartellrechtlichen Missbrauchsaufsicht liefert.

Link to report

Publication

Outside Directors on the Board, Competition and Innovation
August 2018

Buchwald, A. and S. Thorwarth, International Journal of Economics and Business Research, 16 (2), 210-231.

We investigate the influence of non-executive outside directors on firms’innovative performance for a sample of 1,393 listed firms in the EU-15 member states plus Norway and Switzerland in the period 2005 to 2010. Our results show that the fraction of non-executive outside directors on the board is associated with a significant decrease in the number of patent applications if competition in the market is low. This may indicate that restrictive monitoring and lower advising competences of outside directors mitigate executives’ incentives to innovate. In industries with effective competition, the negative influence of outsiders is offset by the pressure to focus on innovation strategies.

Link to publication

Publication

One-Stop Shopping Behavior, Buyer Power, and Upstream Merger Incentives
April 2018

Baye, I., V. Von Schlippenbach and C. Wey, Journal of Industrial Economics, 66, 66-94.

We analyse how consumer preferences for one‐stop shopping affect the (Nash) bargaining relationships between a retailer and its suppliers. One‐stop shopping preferences create ‘demand complementarities’ among otherwise independent products which lead to two opposing effects on upstream merger incentives: first a standard double mark‐up problem and second a bargaining effect. The former creates merger incentives while the later induces suppliers to bargain separately. When buyer power becomes large enough, then suppliers stay separated which raises final good prices. We also show that our result can be obtained when wholesale prices are determined in a non‐cooperative game and under two‐part tariffs.

Link to publication

Statement

Diese Marken sind für Edeka zu wichtig
February 2018

Wey, C., Interview published in Die Zeit (online).

Link to article