Grant Category

Market Structure

Are markets becoming less competitive and, if so, why, and what are the larger implications?

The premise of a market economy is that broad-based economic gains come from a well-functioning market. Yet there is evidence that growing economic inequality is undermining our society’s ability to act collectively in pursuit of the nation’s welfare. When stakeholders who comprise economic systems subvert institutions for their own gain, the economy loses. If markets are becoming less competitive, the resulting increase in monopoly power could be contributing to these problems.

New data-driven research provides more evidence that markets are increasingly concentrated and that, in many cases, this is indicative of a reduction in competition. Markups, the traditional measure of monopoly power, are growing. Investment and new business start-ups have been falling steadily even as corporate profits are rising. At the same time, labor income as a share of national income is falling. Does the economy suffer from a monopoly problem and, if so, why, and what are the larger implications?

We are interested in research from an aggregate perspective, which has been common in the macroeconomic and labor literatures, as well as sectoral analysis that has been the focus of industrial organization literatures.

  • The causes of increased concentration
  • Consequences of concentration for productivity, investment, and economic growth
  • Consequences of concentration for labor markets and power

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The impact of antitrust on competition

Grant Year: 2018

Grant Amount: $70,000

Grant Type: academic

This project entails the collection of empirical metrics of merger outcomes in order to analyze effects beyond prices, taking into consideration other factors such as employment, innovation, and efficiencies. Scott Morton will collect empirical metrics of antitrust enforcement outcomes from publicly available data in company reports, earnings calls, Securities and Exchange Commission filings, and from other sources such as industry analysts and consulting services in order to create a novel dataset. Information will be collected before and after a merger. Data will then be compared to the outcomes predicted by the merging firms. A second component of the research will examine the purposes and outcomes of acquisitions in the high-tech sector to determine whether acquisitions are motivated by increased efficiencies or by the elimination of competitors, a question that is largely unexplored. This line of inquiry seeks to test whether recent acquisitions have stifled innovation. This project is poised to make a considerable contribution to our understanding of the effects of mergers and acquisitions. Little evidence currently exists, resulting in a high burden on the agencies to justify challenges to proposed mergers and acquisitions.

Unions, managers and monopolies: how concentration and managerial power contribute to rising wage inequality

Grant Year: 2017

Grant Amount: $15,000

Grant Type: doctoral

The extent to which income inequality can be traced to shifts in the distribution of rents and/or to declines of workers’ share of those rents is an open and important question, one that researchers have had difficulty answering due to data limitations. This research will link multiple administrative datasets to assess how concentration in managerial power contributes to rising wage inequality. The research will make an important contribution to our understanding of the larger forces generating income inequality—specifically, how corporate decision-making that fuels market concentration may also fuel income inequality

Concentration of corporate ownership and inequality

Grant Year: 2017

Grant Amount: $15,000

Grant Type: doctoral

This project will look at how the concentration of corporate ownership and mergers and acquisitions affects inequality and workers’ well-being by evaluating the relationship between growing market concentration and the declining labor share of income. The research proposes to distinguish two channels by which greater concentration could matter: reduced product market competition, which would directly increase the profit share of gross domestic product and thereby reduce the labor share, and reduced labor market competition—which would directly reduce the labor share.

Vertical dis-integration and the reallocation of risk and revenues in production networks: the case of franchising

Grant Year: 2017

Grant Amount: $15,000

Grant Type: doctoral

This research asks whether vertical disintegration strategies, such as outsourcing and franchising, are merely efficiency-enhancing or if they are also strategies to manipulate the legal boundaries of the firm to gain greater revenues and shift risk onto less powerful suppliers, contractors and franchisees. The research focuses specifically on franchises and proposes to build a unique new dataset based on financial data from court cases. Particular areas of exploration include questions of bargaining power, risk, royalty rates, and contract terms.

Prediction and the moral order

Grant Year: 2017

Grant Amount: $15,000

Grant Type: doctoral

A structural change in the United States economy—huge new flows of personal information stemming from technological innovation—has enabled companies to classify, sort and rank individuals in ways previously unimaginable. This research proposes to use big data from car insurance providers to predict market decisions by looking at how regulators, members of industry and other key actors together establish the market rules by which personal data determines economic opportunity. It asks on what grounds policy and market actors conclude that it is fair to treat people differently in the marketplace based on their personal data “traces,” and seeks to show how some, but not other, ideas get embedded in markets over time.

Schedule stability study

Grant Year: 2016

Grant Amount: $72,100

Grant Type: academic

Through an intervention with a major U.S. retailer (The Gap), the project tests whether shifting hourly workers to more stable schedules results in cost savings and increased productivity for businesses. In the second year of work, Williams and her team continued to make progress, including broadening the intervention in three important ways: an increase in hours, which research shows can improve sales by adding staffing at peak hours; agreeing to consider sources of instability stemming from the supply chain; and adding a worker survey and focus groups to gather information on scheduling impacts, pre and post intervention, on workers’ and their families’ well-being.

Experts

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Morris Kleiner

University of Minnesota

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Heather Sarsons

University of Chicago

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Leah Stokes

University of California, Santa Barbara

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Joan Williams

University of California, Hastings College of Law

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Martina Jasova

Barnard College

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