Are all institutions equally able to implement welfare-maximizing policies? Which institutional features facilitate optimal competition enforcement? Do enforcement agencies optimize (e.g., maximize consumer welfare) subject only to the constraints imposed by asymmetric information? Or are they better characterized as agents that follow legal rules constrained by appeal courts that limit discretion to maximize utility? There is only a small existing literature on specific policy changes either within a country or (very rarely) US-EU comparisons. Hence, there is little academic research available to guide policy makers with respect to exactly those issues of institutional design, which they have direct control over. Competition policy regimes and institutions have been categorized according to certain key dimensions such as independence of decision making, identity of decision makers, legislative instruments, appeals, resources, professional skills, prosecutorial approach, criminalization, compulsory notification of mergers. Moreover, detailed analysis of published cases, calibrated according to key characteristics, has been shown to provide a fertile source of relevant information. In this task we will analyze how different institutional features affect policy effectiveness and consumer welfare. Empirical leverage is provided by variation in institutional design and policy enforcement not just across countries and industries but also over time.

At a more micro-level, the development of instruments for the evaluation of specific competition policy interventions is still uneven with limited high-quality comparative work. Even though the literature on the topic is substantial and continues to grow, no canonical evaluation framework has emerged. Some studies have used simulations to assess the impact of particular merger tools as well as cartels. Other works have used stock market event studies to look at the effectiveness of all EU merger policy. Several recent works have used difference-in-differences estimation to retrospectively assess merger control decisions. Building on our previous work, we apply different empirical methodologies to evaluate some specific merger decisions adopted by the European Commission, as well as national competition authorities. In particular, we will analyze mergers in retail, airline, and telecommunications markets. Additional emphasis will be put on the study of the deterrence properties of merger policy tools as well as on the dynamic effects of EU merger control. To this aim, we will use a newly developed database that covers all EU merger control decisions made by the European Commission since 1990.

On the policy design side, we will focus on legal uncertainty. It has been shown that legal uncertainty might over-deter socially beneficial actions, while under-deterring socially detrimental ones. Legal uncertainty, however, can increase the selectivity of the rules, make enforcement more efficient, and make it more difficult to circumvent rules. The effects of legal uncertainty also influence the trade-off between per se rules and rules of reason. Recently, there has been a major shift away from per se rules exemplified by the case Leegin vs. PSKS (US Supreme Court ‘Leegin Creative Leather Products, Inc. vs. PSKS, Inc.’ Decision No.06-480, 2007). This sub-project aims at challenging the conclusion that legal uncertainty induced by effects-based procedures is harmful.