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Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition (2008)
Farrell, Joseph, Shapiro, Carl
We propose a simple, new test for making an initial determination of whether a proposed merger between rivals is likely to reduce competition and thus lead to higher prices. Under current antitrust...
Mark A. Lemley, Carl Shapiro, Stanford Law School
For many years, economists typically conceptualized patents as well-defined property rights giving their owners either a monopoly over some market or at least a significant competitive advantage in...
2.1. Definition of market power 1079 2.2. Single-firm pricing model accounting for rivals 1080
William E. Kovacic, Carl Shapiro
century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the Sherman Act is unequaled in its generality. The Act outlawed “every...
Improving Critical Loss Analysis (2007)
Farrell, Joseph, Shapiro, Carl
Introduction: Market definition analysis, which is often central in merger cases, usually claims to follow the 1992 Horizontal Merger Guidelines issued by the U.S. Department of Justice and the...
1. Introduction Antitrust Policy During the Clinton Administration * (2007)
For at least twenty years, a broad, bi-partisan consensus has prevailed regarding the goal
Reinvigorating Horizontal Merger Enforcement (2007)
Baker, Jonathan B, Shapiro, Carl
Over the past forty years, there has been a remarkable transformation in horizontal merger enforcement in the United States. With no change in the underlying statute, the Clayton Act, there has been...
Patent Reform: Aligning Reward and Contribution (2007)
Economists and policy makers have long recognized that innovators must be able to appropriate a reasonable portion of the social benefits of their innovations if innovation is to be suitably rewarded...
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers...
Patent Hold-Up and Royalty Stacking (2007)
We study several interconnected problems that arise under the current U.S. patent system when a patent covers one component or feature of a complex product. This situation is common in the...
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers...
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers...
How Strong Are Weak Patents? (2007)
Farrell, Joseph, Shapiro, Carl
We analyze patent licensing by a patent holder to downstream technology users. We study how the structure and level of royalties depends on the patent's strength, i.e., the probability it would be...
Injunctions, Hold-Up, and Patent Royalties (2006)
This paper studies royalty negotiations between a patent holder and a downstream firm selling a product which is more valuable if it includes a feature covered by the patent. Royalties are negotiated...
Keywords: patents, innovation, oligopolyJEL codes: L13, O31.ABSTRACT: Many inventions, great and small, are discovered independently at roughly the same time by two or more individuals or...
How Strong Are Weak Patents (2005)
Joseph Farrell, Carl Shapiro, Michael Katz, Mark Lemley, Josh Lerner, Robert Merges, ...
ABSTRACT. We analyze patent licensing by a patent holder to downstream technology users. We study how the structure and level of royalties depends on the patent’s strength, i.e., the probability it...
Lemley, Mark A., Shapiro, Carl
Economists often assume that a patent gives its owner a well-defined legal right to exclude others from practicing the invention described in the patent. In practice, however, the rights afforded to...
Intellectual Property, Competition, and Information Technology (2004)
Farrell, Joseph, Shapiro, Carl
This paper was prepared as a companion to the Mattioli Lectures delivered by Hal R. Varian, "Economics of Information Technology," available at:...
Matt Lewis, Matt Lewis, Richard Gilbert, Stephen Holl, Aviv Nevo, Carl Shapiro, ...
It has been documented that retail gasoline prices respond more quickly to increases in wholesale price than to decreases. However, there is very little theoretical or empirical evidence identifying...
The FTC's Challenge to Intel's Cross-Licensing Practices (2002)
After an investigation lasting several months, in June 1998 the Federal Trade Commission brought an antitrust lawsuit against Intel Corporation based on Intel's conduct towards Intergraph, and...
The British Petroleum/ARCO Merger: Alaskan Crude Oil (2002)
The merger of British Petroleum and Atlantic Richfield initially would have made BP the sole operator and 70 percent owner of Alaska's oil fields. The Federal Trade Commission challenged the merger...
The Effect of Native Language on Internet Usage (2001)
Our goal is to distinguish between the following two hypotheses: (A) The Internet will remain disproportionately in English and will, over time, cause more people to learn English as second language...
Antitrust Limits to Patent Settlements (2001)
This paper focuses on the class of legal rules that governs intellectual property rights: the antitrust limits imposed on patent settlements.The paper discusses the benefits and costs of settlements...
Abstract: Patents, patent litigation, and patent settlements increasingly influence competition. Settlements of patent disputes comes in many forms, including licensing and cross-licensing...
Intellectual property rights are widely recognized as critical assets in many industries, especially
Navigating the Patent Thicket: Cross Licenses (2001)
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring...
1. Introduction Antitrust Policy During the Clinton Administration * (2001)
For at least twenty years, a broad, bi-partisan consensus has prevailed regarding the goal
Scale Economies and Synergies in Horizontal Merger Analysis (2000)
Farrell, Joseph, Shapiro, Carl
Three years ago, the Antitrust Division and the Federal Trade Commission revised their Horizontal Merger Guidelines to articulate in greater detail how they would treat claims of efficiencies...
Scale Economies and Synergies in Horizontal Merger Analysis (2000)
Farrell, Joseph, Shapiro, Carl
Three years ago, the Antitrust Division and the Federal Trade Commission revised their Horizontal Merger Guidelines to articulate in greater detail how they would treat claims of efficiencies...
Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting (2000)
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring...
Setting Compatibility Standards: Cooperation or Collusion? (2000)
This paper describes the process by which firms cooperate to establish product compatibility and interface standards, and studies the impact such standards have on market competition. Special...
Antitrust Policy: A Century of Economic and Legal Thinking (1999)
Kovacic, William E., Shapiro, Carl
Passage of the Sherman Act in the United States in 1890 set the stage for a century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the...
Antitrust Policy: A Century of Economic and Legal Thinking (1999)
William E. Kovacic, Carl Shapiro
This article follows the evolution of thinking about competition since 1890 as reflected by major antitrust decisions and research in industrial organization. We divide the U.S. antitrust experience...
Competition Policy In The Information Economy (1999)
Many of the so-called industrial nations are indeed experiencing a transition to an information-based economy, in the sense that ICE -- information, communications, and entertainment -- comprises an...
Competition Policy In The Information Economy (1999)
Many of the so-called industrial nations are indeed experiencing a transition to an information-based economy, in the sense that ICE -- information, communications, and entertainment -- comprises an...
Includes bibliographical references (leaves 65-66).
Consumer information, product quality, and seller reputation /--by Carl Shapiro. (1980)
Supervised by Richard Schmalensee.
Advertising and Welfare: Comment
In an earlier article Dixit and Norman studied the welfare effects of advertising. They came to the surprising conclusion that, even accepting postadvertising tastes as the welfare standard, monopoly...
Consumer Information, Product Quality, and Seller Reputation
This article analyzes markets in which consumers are imperfectly informed about product quality. An important force that prevents deterioration of the quality supplied by sellers is the formation of...
Optimal Pricing of Experience Goods
A monopolist's optimal price path over time is examined for situations in which consumers initially misestimate product quality and learn about it by using the good. Information about the product is...
We analyze a two-country model of trade in both legitimate and counterfeit products. Domestic firms own trademarks and establish reputations for delivering high-quality products in a steady- state...
An economic analysis of unilateral refusals to license intellectual property
Gilbert, Richard J., Shapiro, Carl
The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the...
An economic analysis of unilateral refusals to license intellectual property
Gilbert, Richard J., Shapiro, Carl
The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the...
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers...
Gene M. Grossman, Carl Shapiro
We analyze a two-country model of trade in both legitimate and counterfeit products. Domestic firms own trademarks and establish reputations for delivering high-quality products in a steady-state...
Foreign Counterfeiting of Status Goods
Gene M. Grossman, Carl Shapiro
We study the positive and normative effects of counterfeiting, i.e.,trademark infringement, in markets where consumers are not deceived by forgeries.The fact that consumers are willing to pay more...
Gene M. Grossman, Carl Shapiro
We study a simple, two-stage, stochastic patent race involving two firms. We examine the behavior of the participants as they gain the lead or fall behind in the race. We find that the leader engages...
Antitrust Issues in the Licensing of Intellectual Property: The Nine No-No's Meet the Nineties
macroeconomics, antitrust, intellectual property
Product Introduction with Network Externalities.
Katz, Michael L, Shapiro, Carl
The authors study the introduction of a new product in a market with network externalities. There is a common presumption that such markets exhibit excess inertia, i.e., that they are biased toward...
Optimal Contracts with Lock-In.
Farrell, Joseph, Shapiro, Carl
The authors analyze incomplete long-term contracts when buyers incur relationship-specific set-up costs and sellers choose product or service quality that is not verifiable to third parties. If...
Grossman, Gene M, Shapiro, Carl
The authors analyze trade in both legitimate and counterfeit products. Domestic firms ow n trademarks and establish reputations for delivering high-quality pr oducts in a steady-state equilibrium....
R&D Rivalry with Licensing or Imitation.
Katz, Michael L, Shapiro, Carl
The authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post-development dissemination of the innovation, such as licensing or imitation. This...
Economists often assume that a patent gives its owner a well-defined legal right to exclude others from practicing the invention described in the patent. In practice, however, the rights afforded to...
Grossman, Gene M, Shapiro, Carl
The authors study a simple, two-stage, stochastic patent race involving two firms. They examine the behavior of the participants as they gain the lead or fall behind in the race. The authors find...
Antitrust Issues in the Licensing of Intellectual Property: The Nine No-No's Meet the Nineties
macroeconomics, antitrust, intellectual property
Scale Economies and Synergies in Horizontal Merger Analysis
Three years ago, the Antitrust Division and the Federal Trade Commission revised their Horizontal Merger Guidelines to articulate in greater detail how they would treat claims of efficiencies...
Horizontal Mergers: An Equilibrium Analysis.
Farrell, Joseph, Shapiro, Carl
The authors analyze horizontal mergers in Cournot oligopoly. They find general conditions under which such mergers raise price, and show that any merger not creating synergies raises price. The...
Systems Competition and Network Effects.
Katz, Michael L, Shapiro, Carl
This paper discusses firm behavior, market performance, and the public and private institutions that arise in systems markets, i.e., markets where consumers use compatible components together to...
Scale Economies and Synergies in Horizontal Merger Analysis
Three years ago, the Antitrust Division and the Federal Trade Commission revised their Horizontal Merger Guidelines to articulate in greater detail how they would treat claims of efficiencies...
The FTC's Challenge to Intel's Cross-Licensing Practices
After an investigation lasting several months, in June 1998 the Federal Trade Commission brought an antitrust lawsuit against Intel Corporation based on Intel's conduct towards Intergraph, and...
Antitrust Limits to Patent Settlements
This paper focuses on the class of legal rules that governs intellectual property rights: the antitrust limits imposed on patent settlements. The paper discusses the benefits and costs of settlements...
Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring...
Antitrust Policy: A Century of Economic and Legal Thinking
William E. Kovacic, Carl Shapiro
Passage of the Sherman Act in the United States in 1890 set the stage for a century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the...
Antitrust Limits to Patent Settlements.
Patents, patent litigation, and patent settlements increasingly influence competition. Settlements of patent disputes come in many forms, including licensing and cross-licensing agreements, patent...
Optimal Patent Length and Breadth
In providing rewards to innovators, there is a tradeoff between patent length and breadth. This article provides conditions under which the optimal patent policy involves infinitely-lived patents,...
Asset Ownership and Market Structure in Oligopoly
We study the effects of changes in the ownership or productive assets in a concentrated industry. Using a Cournot model, we analyze (1) investment by an oligopolist, (2) the sale of capital goods by...
Dynamic Competition with Switching Costs
We analyze an overlapping-generations model of duopolistic competition in the presence of consumer switching costs. Competition for established buyers is continually intermingled with competition for...
Gene M. Grossman, Carl Shapiro
We study the optimal pattern of outlays for a single firm pursuing an R&D program over time. In the deterministic case (a) the amount of progress required to complete the project is known and (b) the...
On the Licensing of Innovations
We study a three-stage, asymmetric duopoly game of R&D rivalry. The stages are: (1) development of an innovation; (2) fixed-fee licensing of the innovation; and (3) sale of the final product. We find...
Antitrust Policy: A Century of Economic and Legal Thinking
Passage of the Sherman Act in the United States in 1890 set the stage for a century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the...
Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring...
Scale Economies and Synergies in Horizontal Merger Analysis
Three years ago, the Antitrust Division and the Federal Trade Commission revised their Horizontal Merger Guidelines to articulate in greater detail how they would treat claims of efficiencies...
Antitrust Limits to Patent Settlements
This paper focuses on the class of legal rules that governs intellectual property rights: the antitrust limits imposed on patent settlements.The paper discusses the benefits and costs of settlements...
Foreign Counterfeiting of Status Goods.
Grossman, Gene M, Shapiro, Carl
The authors study the positive and normative effects of counterfeiting, i.e., trademark infringement, in markets where cons umers are not deceived by forgeries. Consumers are willing to pay mor e for...
Product Compatibility Choice in a Market with Technological Progress.
Katz, Michael L, Shapiro, Carl
In markets where advantages, e.g., network ex ternalities, are significant, firms' product compatibility choices are an import ant determinant of industry performance. This paper compares the private...
Kaplow, Louis, Shapiro, Carl, A. Mitchell Polinsky, Steven Shavell
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers...
The BP Amoco/ARCO Merger: Alaskan Crude Oil
Bulow, Jeremy I., Shapiro, Carl
The merger of British Petroleum and Atlantic Richfield as proposed would have made BP the sole operator and 70 percent owner of Alaska’s oil fields. The Federal Trade Commission challenged the...
We study the welfare economics of probabilistic patents that are licensed without a full determination of validity. We examine the social value of instead determining patent validity before licensing...
Competition Policy and Innovation
This paper seeks to improve understanding of the links between innovation and competition policy. It is intended to help OECD Member countries identify ways in which they can design and implement...
Gene M. Grossman, Carl Shapiro
We study the optimal pattern of outlays for a single firm pursuing an R&D program over time. In the deterministic case, (a) the amount of progress required to complete the project is known, and (b)...
Patent Reform: Aligning Reward and Contribution
Economists and policy makers have long recognized that innovators must be able to appropriate a reasonable portion of the social benefits of their innovations if innovation is to be suitably rewarded...
The Economics of Information Technology
Varian,Hal R., Farrell,Joseph, Shapiro,Carl
The Economics of Information Technology is a concise and accessible review of some of the important economic factors affecting information technology industries. These industries are characterized by...
The Economics of Information Technology
Varian,Hal R., Farrell,Joseph, Shapiro,Carl
The Economics of Information Technology is a concise and accessible review of some of the important economic factors affecting information technology industries. These industries are characterized by...