Joseph E. Harrington

Bio: Joseph E. Harrington is an academic researcher from University of Pennsylvania. The author has contributed to research in topics: Cartel & Collusion. The author has an hindex of 43, co-authored 138 publications receiving 6577 citations. Previous affiliations of Joseph E. Harrington include Maastricht University & Johns Hopkins University.

Economics of regulation and antitrust

Abstract: Departing from the traditional emphasis on institutions, this text emphasizes the use of economic theory and empirical analysis to understand regulatory and antitrust policies. Questions addressed include: What are the market failure rationales for, and appropriate form of, government intervention? What does theory show about competition in the presence of a market failure and the implications of government intervention to correct that failure? What do empirical analyses indicate about our regulatory experience and the direction of future intervention? The third edition addresses many issues that have recently dominated the economic and political landscape. New material reviews the government's case against Microsoft, charges of anticompetitive pricing in NASDAQ and airlines, the blocked Staples-Office Depot merger, and the Telecommunications Act of 1996. This edition also covers the deregulation of the California electric power industry as well as recent deregulatory efforts in bank branching and natural gas transmission. On the social regulatory scene, it covers in detail recent cigarette litigation and the contentious issue of the contingent valuation of natural resource damages, as exemplified in the Exxon Valdez oil spill. New empirical evidence appears throughout the book. Each part of the text can be used separately for a variety of courses including regulation and antitrust in undergraduate institutions, business schools, and schools of public policy, as well as background for doctoral courses. Exercises are included at the end of each chapter.

The Impact of Cyclical Demand Movements on Collusive Behavior

Abstract: Recent work by Rotemberg and Saloner (1986) investigates the effect of the business cycle on optimal collusive pricing by specifying that demand is subject to i.i.d. shocks. An implication of the i.i.d. assumption is that firms' expectations on future demand are unrelated to the current level of demand. We put forth a model that allows for both the level of current demand and firms' expectations on future demand to change over time; thus it captures two important properties of the business cycle. Our analysis reveals that while the gain to deviating from a collusive agreement is greatest during booms, firms find it most difficult to collude during recessions, as the forgone profits from inducing a price war are relatively low. An implication of this effect for pricing behavior is that at the same level of demand, price is lower when demand is declining than when demand is rising. Consistent with previous theoretical work, we find that firms price countercyclically for a range of values for the discount factor. However, numerical simulations reveal a greater tendency for firms to price countercyclically during recessions than during booms.

Optimal corporate leniency programs

Abstract: This study characterizes the corporate leniency policy that minimizes the frequency with which collusion occurs. Though it can be optimal to provide only partial leniency, plausible sufficient conditions are provided whereby the antitrust authority should waive all penalties for the first firm to come forward. It is also shown that restrictions should be placed on when amnesty is awarded, though it can be optimal to award amnesty even when the antitrust authority is very likely to win the case without insider testimony.

How Do Cartels Operate

Abstract: This paper distills and organizes facts about cartels from about 20 European Commission decisions over 2000-2004. It describes the properties of a collusive outcome in terms of the setting of price and a market allocation, monitoring of agreements with respect to price but more importantly sales, punishment methods for enforcing an agreement and also the use of buy-backs to compensate cartel members, methods for responding to external disruptions from non-cartel suppliers and handling over-zealous sales representatives, and operational procedures in terms of the frequency of meetings and the cartel’s organizational structure.

Economic policy, economic performance and elections

Abstract: This paper explores the role of reelection pressures in determining economic policy. By assuming that voters are uncertai n as to the efficacy of different policies, a reelection process is derived that depends on both a politician's past policies and the level of economic activity during his time in office. It is shown th at the less uncertain are voters as to which policy is best, the more likely is a politician to manipulate policy for reelection purposes. Manipulation entails implementing the policy that is more likely to be well received rather than the one that maximizes income. Copyright 1993 by American Economic Association.

Managing Knowledge in Organizations: An Integrative Framework and Review of Emerging Themes

Abstract: In this concluding article to the Management Science special issue on "Managing Knowledge in Organizations: Creating, Retaining, and Transferring Knowledge," we provide an integrative framework for organizing the literature on knowledge management. The framework has two dimensions. The knowledge management outcomes of knowledge creation, retention, and transfer are represented along one dimension. Properties of the context within which knowledge management occurs are represented on the other dimension. These properties, which affect knowledge management outcomes, can be organized according to whether they are properties of a unit (e.g., individual, group, organization) involved in knowledge management, properties of relationships between units or properties of the knowledge itself. The framework is used to identify where research findings about knowledge management converge and where gaps in our understanding exist. The article discusses mechanisms of knowledge management and how those mechanisms affect a unit's ability to create, retain and transfer knowledge. Emerging themes in the literature on knowledge management are identified. Directions for future research are suggested.

An Economic Model of Representative Democracy

Abstract: This paper develops an approach to the study of democratic policy-making where politicians are selected by the people from those citizens who present themselves as candidates for public office. The approach has a number of attractive features. First, it is a conceptualization of a pure form of representative democracy in which government is by, as well as of, the people. Second, the model is analytically tractable, being able to handle multidimensional issue and policy spaces very naturally. Third, it provides a vehicle for answering normative questions about the performance of representative democracy.

Multimarket contact and collusive behavior

Abstract: Traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions, concentration, and barriers-to-entry. Nevertheless, some economists have remained concerned that external factors, such as contact across markets, may also play a significant role in determining the level of competitiveness in any particular industry. In this article, we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition. We isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms.