Journal Article

CAN LOBBYING PREVENT ANTICOMPETITIVE OUTCOMES? EVIDENCE ON CONSUMER MONOPSONY IN TELECOMMUNICATIONS

Dino Falaschetti

in Journal of Competition Law & Economics

Volume 4, issue 4, pages 1065-1096
Published in print December 2008 | ISSN: 1744-6414
Published online June 2008 | e-ISSN: 1744-6422 | DOI: https://dx.doi.org/10.1093/joclec/nhn014
CAN LOBBYING PREVENT ANTICOMPETITIVE OUTCOMES? EVIDENCE ON CONSUMER MONOPSONY IN TELECOMMUNICATIONS

More Like This

Show all results sharing these subjects:

  • Marketing
  • Analysis of Collective Decision-making
  • Energy and Utilities
  • Antitrust Issues and Policies
  • Law and Economics
  • Regulation and Industrial Policy
  • Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
  • Public Economics

GO

Show Summary Details

Preview

When basic competition rules cannot stop market power abuses, industry-specific regulations can improve economic performance. But regulations are also more immediately exposed to political pressures than are judicially administered antitrust laws, and this exposure can cause regulations to serve distributional rather than efficiency goals. Instead of supporting a Chicago School hypothesis where distributional forces tend to favor producers, however, I find evidence that regulations can inefficiently expand consumer surplus when producers lack a political voice. In particular, local exchange carriers maintain significantly smaller capital stocks in states that restrict campaign contributions from regulated utilities. This relationship is difficult to rationalize as either a statistical artifact or evidence that campaign finance laws discourage producers from restraining trade. Indeed, rather than endowing producers with political currency to capture regulators, allowances for campaign contributions appear to have strengthened competition by discouraging regulatory takings and balancing monopsonistic pressures from consumer-voters. These results highlight an empirically important potential for regulations to overly favor consumers, and strengthen arguments against consumer surplus as an objective for competition policies.

Keywords: D72; E61; H11; K23; L43; L51; L96; M38

Journal Article.  12089 words.  Illustrated.

Subjects: Marketing ; Analysis of Collective Decision-making ; Energy and Utilities ; Antitrust Issues and Policies ; Law and Economics ; Regulation and Industrial Policy ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook ; Public Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content. subscribe or login to access all content.