Contents

List of contributors

Introduction
Manfred Neumann and Jurgen Weingand

1 Globalization and the natural Iimits of competition
Stephen Martin

1 Introduction
2 The natures of competition
3 Actual rivalry and its limits
4 Potential rivalry and its limits
5 Globalization and the Iimits of competition as a policy
6 Conclusion

2 Efficiency versus market power through mergers
Dennis C Mueller

1 Introduction
2 Hypotheses about why mergers occur
3 The effects of mergers on share prices
4 The effects of rnergers on profitability
5 Effects of mergers on market share and growth
6 Effects of mergers on profits and sales
7 Additional evidence regarding the effects of mergers on market share and growth
8 Policy implications

3 SmalI firms, innovation and competition
David B. Audretsch

I Introduction
2 The knowledge production function
3 The role of firm size
4 The industry contem
5 The geographic context
6 The knowledge production function reconsidered
7 Conclusions

4 Trade policy and competition policy: conflict vs. mutual support
Eric Bond

1 Introduction
2 The welfare effects of trade and competition policies
3 Trade and competition policy for small countries
4 Tariff and competition policy for a large country
5 The political economy of competition and trade policy
6 Conclusions

5 Financial services: consolidation and strategic positioning
Arnoud Boot

1 Introduction
2 Fundamentais: the economics of banking
3 Scale and scope issues in banking
4 Scope as a strategic advantage
5 Competition, fragility and pubiic policy
6 Value of alliances
7 Concluding remarks

6 Political economy of antitruste
Charles Rowley and Anne Rathbone

1 Introduction
2 The perspective of neoclassical welfare economics
3 The University of Chicago perspective on antitrust policy
4 The perspective of the theory of interest group politics
5 The evidence
6 Conclusions

7 Dominance and monopolization
Marcel Canoy, Patrick and Eric van Damme

1 Dominance and competition policy
2 Regulation versus competition policy
3 Single-firm dominance and monopolization
4 Dominance through collusion
5 Dominance versus monopolization: a legal overview
6 Dominance versus substantial lessening of competition
7 Research agenda

8 ldentifying antitrust markets
Paul Geroski and Rachel Griffith

1 Why define markets?
2 The SSNIP test
3 Some complications
4 Assessing competitiveness
5 Some final reflections
6 Appendix: the simple algebra of SSNIP

9 Competition policy and regulation: administration vs. judiciary
Christian Kirchner

1 Introduction
2 Conipetition policy and regulation: non-competing orcompeting institutional devices?
3 An institutional economics approach to competition policy and regulation
4 Competition policy and regulation during deregulation
5 Competition policy, regulation and the transformation of state monopolies
6 Concluding remarks

10 Competition policy in a globalized economy: from extraterritorial application to harmonization
Jurgen Basedow

1 The worldwide boom of competition law and its harmonization
2 Is extraterritorial application sufficient?
3 Enforcement deficits
4 The competition of competition legislations
5 The feasibility of harmonization
6 The goals of harmonization
7 A pragmatic approach

Index