The common ownership hypothesis suggests that when large investors own shares in more than one firm within the same industry, those firms may have reduced incentives to compete. Firms can soften competition by producing fewer units, raising prices, reducing investment, innovating less, or limiting entry into new markets. The U.S. Department of Justice, the Federal Trade Commission, the European Commission, and the Organisation for Economic Co-operation and Development have all acknowledged concerns about the anticompetitive effects of common ownership and have relied on the theory and evidence of common ownership in major merger cases. This is a series of four separate projects by the four researchers. The first project seeks to show a link between executive compensation and measures of common ownership, providing a "mechanism" for how common ownership might affect competition and consumption. The second focuses on innovation, building on recent work and seeking to incorporate effects of common ownership, which are predicted to vary according to technological and product-market relationships. The third project is largely theoretical and will study the size and magnitude of the relationship between common ownership and innovation and the extent to which that varies across the universe of publicly listed U.S. corporations. Finally, the fourth project is a data collection effort, expanding the universe of high-quality common ownership data outside of the United States.

This historical analysis focuses on whether racial discrimination by firms led to underprovision of content for minorities in the U.S. radio market in the post-war Jim Crow era and whether competition in the market reduced the racial divide. More specifically, the researcher looks at how the entry of television in local markets in the 1950s and 1960s affected programming for Black audiences. Using Federal Communications Commission annual financial reports, directories of radio stations, and the National Opinion Research Center’s 1944 and 1946 racial attitude surveys, the author will analyze how and if discrimination played a role in firms’ programming decisions.

Prior research suggests that concentration and firm mark-ups have increased in the United States over the past several decades, potentially resulting in a higher share of income going to capital instead of labor. These previous multi-industry studies have not addressed why concentration and mark-ups may have increased, and how policies, such as greater antitrust enforcement or merger review, could alter these trends. This project aims to contribute to these unanswered questions by focusing on an industry-specific analysis. Utilizing cement industry data from the United States between 1973 and 2019, the authors will explore how technological change sparked by the introduction of the precalciner kiln altered market structure and the changes in the share of income going to owners’ profits relative to workers’ wages over time.

This project will provide estimates of the impact of prospective merger reviews on antitrust enforcement actions, product prices, input prices, output, investment, and research and development. Using administrative data collected through taxation, employment, and antitrust provision, the project exploits the introduction of a premerger notification policy in Chile to see how it changed the types of mergers being agreed to. The result will help policymakers understand how much notification systems have a deterrent impact. Prospective merger reviews constitute a large share of antitrust enforcement expenditures, and yet little work has systematically studied its effectiveness. By providing a comprehensive study across industries using detailed data on real economic variables, this project could provide invaluable insights into the effects of mergers in both input and output markets, the impact of notification requirements, and the resource allocation within enforcement agencies.

Policy changes at the state and local levels have created recreational cannabis markets in many municipalities across the United States. It is well-known that the War on Drugs disproportionately incarcerated members of the Black and Latinx communities. This research project will explore how the legalization of recreational cannabis in Seattle, Boston, and San Francisco integrated criminal justice and racial economic equity initiatives. The researcher will conduct interviews and complete a comparative case study of policy debates and implementation. Using this mixed-methods approach, the researcher intends to illuminate how market power granted by states can shape equity.

This project asks whether standard merger simulation techniques in industrial organization effectively predict price changes in observed mergers, and if not, if predictions depart from reality systematically and in a way consistent with efficiencies or coordinated effects. Using scanner data, the authors will run a standard merger simulation on a large set of completed mergers and compare predictions to outcomes, creating a comprehensive retrospective of the effects of mergers on prices, which will inform us of whether typical approved mergers in the United States tend to increase prices. They will also study the sources of the prediction error.

Regulation of merger policy is a primary tool of competition policy in the United States. Merger simulations are used to decide whether mergers are anti-competitive or whether they should be permitted. This ambitious project could provide a wealth of information about consummated mergers and the predictive power of merger simulation techniques, contributing to the infrastructure used to regulate competition.