ARTICLES
Competition policy

Error and Design: Economics in (and some Economics of) the Australian Competition Tribunal

Created on Friday, 15 January 2010 11:00
The Australian Competition Tribunal plays a central role in the Australian regulatory system. Three of the Tribunal’s recent decisions are examined and found to have significant errors. It is argued on the basis of the economics of the institutional design that these errors are inevitable in a system where regulatory decisions are based on vague standards. It is concluded that the quality of regulation would be improved by a shift to a regulatory system that relied less on such vague standards and more on prescriptive, explicit rules.

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ErrorDesignEconomicsCompetition.pdf
Competition policy

The ACCC Merger Guidelines: A reader's manual

Created on Wednesday, 16 December 2009 11:00
The ACCC Merger Guidelines: A reader’s manual
Henry Ergas,' Eric Kodjo Ralph† and Alex Robson‡
The Merger Guidelines released in March 2008 by the ACCC provide a guide to the analytical approach the ACCC intends to adopt to assessing mergers for the purposes of s50 of the Trade Practices Act. The new guidelines do a relatively good job in listing the factors that the contemporary economic literature identifies as potentially characterising mergers that reduce competition and harm consumer welfare.  However, unlike the earlier guidelines, they rarely explain the mechanism connecting the factors to the harm, and the conditions that need to be met for that harm to occur.  This article provides a ‘user’s guide’ to the guidelines that explains the reasoning that underpins the guidelines’ assertions, and draws attention to the assumptions on which those assertions rest.  We also provide an economic assessment of the guidelines and recommend a simpler criterion by which the ACCC should judge mergers.

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ergas_ralph_robson_1.pdf
Competition policy

Setting access prices:A critique of the ACCC’s approach in 268

Created on Tuesday, 23 December 2008 11:00
Third-party access regimes, which impose on an incumbent an obligation to provide third parties with access to designated services and facilities at regulated terms and conditions, have become widespread in Australian 266 industries since the Hilmer Report (Independent Committee of Inquiry into Competition Policy in Australia 1993) and the subsequent implementation of National Competition Policy in 1995. Click the link below for the full article.

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setting_access_prices_ergas_dec08.pdf
Competition policy

In Defence of Cost Benefit Analysis

Created on Thursday, 10 September 2009 10:00
In this paper for "Agenda" (Volume 16, Number 4) Henry compares cost-benefit analysis (CBA) to multi-criteria analysis (MCA). Henry reviews the nature of the two approaches and considers the criticisms that have been made of CBA. He concludes that these criticisms largely lack merit, and that even to the extent to which they are meritorious, they provide no justification for relying on MCA. He concludes by expressing his concerns about the growing role of MCA in Australian project appraisal, which is symptomatic of a broader move away from sound policy evaluation.

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In_Defence_of_Cost-Benefit_Analysis.pdf
Competition policy

Fearless watchdog or his master's voice

Created on Monday, 11 August 2008 10:00
The Australian Competition and Consumer Commission will lose its reputation for independence if it keeps coming up with politically convenient schemes for the 264, warns Henry Ergas

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Fearless_watchdog_or_his_master_s_voice_1.pdf
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