KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 1 Economic Policy and Market Regulation Part 4 Dr. Stefan Kooths BiTS Berlin (winter term 2013/2014)

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 2 Outline 1.Introduction and Overview 2.Market Mechanisms and Government Interventions 3.Externalities and Public Goods 4.Competition Policy and Regulation  Competitive markets vs. market power  Anti-competitive behavior and anti-trust policies  Natural monopolies 5.Ordoliberalism and the Social Market Economy 6.Summary: The Key Lessons Learnt

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 3 Monopoly: Price, quantity, and welfare effects

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 4 Price discrimination

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 5 Temporary monopolies (pioneer profits), dynamic efficiency, and contestable markets

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 6 Cartels: Potential profits and fragility

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 7 Outline 1.Introduction and Overview 2.Market Mechanisms and Government Interventions 3.Externalities and Public Goods 4.Competition Policy and Regulation  Competitive markets vs. market power  Anti-competitive behavior and anti-trust policies  Natural monopolies 5.Ordoliberalism and the Social Market Economy 6.Summary: The Key Lessons Learnt

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 8 Anti-competitive strategies (overview)  Cartels and collusion  Abuse of dominant market position  Mergers and acquisitions

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 9 Anti-trust policy concepts (overview)  Laissez-faire approach  Structure approach  Regulation approach  Ownership approach

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 10 Per se-rule vs. rule of reason

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 11 Ex ante vs. ex post approach

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 12 Problem of the relevant market

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 13 Outline 1.Introduction and Overview 2.Market Mechanisms and Government Interventions 3.Externalities and Public Goods 4.Competition Policy and Regulation  Competitive markets vs. market power  Anti-competitive behavior and anti-trust policies  Natural monopolies 5.Ordoliberalism and the Social Market Economy 6.Summary: The Key Lessons Learnt

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 14 Economies of scale

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 15 Subadditivity of cost functions

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 16 Role of potential competition (contestable markets)

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 17 Regulation: Price-cap vs. rate-of-return

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 18 Auctioning

KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 4 19 Ordoliberalism and the Social Market Economy Demokratischer Staat Constitution Social economy Competition Protec- tion Regu- lation