OP: 8  Competition Policy Research: Where do we Stand?
Author(s): Kai-Uwe Kühn, Paul Seabright and Alasdair Smith
Publication Date: July 1992

Abstract: This paper is intended to set out some views on current and possible future directions in research on competition policy, in order to elicit the reactions of both academics and policy-makers. The purpose of this exercise is to enable the CEPR's initiative on 'Market Structure, Industrial Organization and Competition Policy' to be sensitive to the perceived needs of those making policy today - to ensure that the questions we set out to answer are questions that matter not just abstractly but also for practical decisions. It is organized as follows. The introductory section defines the province of competition policy and summarizes its central dilemmas. Then we discuss a number of issues that arise when a firm has market power but do not necessarily involve strategic interaction with particular competitors. we look at the nature and definition of market power, at the market for corporate control and its incentive effects, and at the nature of innovation and the patent system. Next we look at a series of issues that involve the relations between a firm and it's suppliers, distributors or competitors. Finally we discuss a series of questions of institutional design, concentrating particularly on the choice between rules and discretion, and the question to what extent there should be separation of powers between competition authorities and other branches of government, or between the domestic authorities and those involved in international issues such as the implementation of anti-dumping provisions. Throughout the paper the aim will be to ask: What reasonably robust prescriptions have emerged from competition policy research in the last five or ten years? What are the most important unresolved theoretical and empirical questions? And on which of these does it seem feasible to make the most progress over the next few years?

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