Market Regulation

INTRODUCTION
1 Introduction to Market Regulation
1.1 Governmental Market Regulation
1.2 The Context of Market Regulation
1.3 Law and Politics

2 Competition as Market Regulator
2.1 The Firm's Production Costs
2.2 Competition as Regulator
2.3 The Economic Welfare Goal of Market Regulation

3 Problems for Competition as Regulator
3.1 Entry and Exit Barriers
3.2 Monopoly
3.3 Differentiated Products
3.4 Externality
3.5 Imperfect Information
3.6 Transaction Costs


PART I THE REGULATION OF COMPETITION
4 Focus of the Law: The Modern Business Firm
4.1 The Business Firm and the Market
4.2 The Goal of the Firm
4.3 Corporate Finance
4.4 Hierarchy and Control
4.5 Corporate Mergers
4.6 Vertical Integration and Vertical Restraints

5 Market Structure
5.1 Market Structure
5.2 Duopoly and Oligopoly
5.3 Entry and Conditions
5.4 Concentration Measures
5.5 Empirical Evidence
Appendix 5.1 Cournot's Solution to Duopoly
Appendix 5.2 Cournot from Monopoly to Many Firms
Appendix 5.3 Entry in the Cournot Model
Appendix 5.4 Stackelberg's Leader-Follower Solution

6 Market Strategy
6.1 The Tools of Strategy
6.2 Price Competition Among Few Firms
6.3 Non-Price Competition
6.4 Advertising

7 Market Innovation
7.1 Intellectual Property and Technological Change
7.2 Appropriating Gains from Innovation
7.3 Patents and the Appropriability of Gains
7.4 Market Structure and Incentive for Innovation
7.5 Patent Races and Other Dynamic Effects of Competition
7.6 The Internet as an Example of Major Innovation

8 The Origin and Development of Antitrust Law
8.1 The Beginnings of Antitrust Policy
8.2 The Sherman Act
8.3 The Clayton and Federal Trade Commission Acts
8.4 Enforcement Agencies and Remedies
8.5 Should Courts Oppose Monopoly Conduct or Monopoly Power?
8.6 Government Control of Mergers
8.7 Unfair and Deceptive Practices
Appendix 8.1 Horizontal Merger Guidelines
Appendix 8.2 Time Line for Major Antitrust Legislation

9 Applications of Antitrust Law
9.1 The Firm and Market Structure
9.2 The Firm and Market Strategy
9.3 The Firm and Market Innovation


PART II THE REGULATION OF INDUSTRIES
10 Industry Regulation
10.1 When Competition Fails to Regulate
10.2 Competitive Markets or Government Intervention?
10.3 The Transformation of Regulated Industries
10.4 Economic Welfare Revisited

11 Pricing Principles
11.1 Peak-Load Pricing
11.2 Ramsey Pricing
11.3 Nonuniform Pricing
11.4 Access Pricing
Appendix 11.1 Socially Optimal Pricing
Appendix 11.2 Long-Run Marginal-Cost Pricing
Appendix 11.3 Axiomatic Pricing

12 Institutions of Industry Regulation
12.1 Industry Regulatory Agencies
12.2 Regulated Enterprises
12.3 Rate-of-Return Regulation
12.4 Designing a Regulatory Mechanism
12.5 Price-Cap Regulation
12.6 The Role of Access in Transforming Regulated Industries
Appendix 12.1 Rate-of-Return Regulation and Its Origins

13 Postal Service
13.1 The Budget-Constrained Public Enterprise
13.2 Creation of the United States Postal Service
13.3 Maximizing Welfare or Expenditure
13.4 Ramsey Pricing in the United States Postal Service
13.5 Unbundling Postal Service Functions
Appendix 13.1 Budget vs. Welfare Maximizing Prices
Appendix 13.2 Pricing Guidelines of the Postal Reorganization Act

14 Communications Services
14.1 The Economics of Telephone Networks
14.2 Early Regulation of the United States Telephone Industry
14.3 The Modification of Final Judgment
14.4 The Telecommunications Act of 1996
14.5 New Sources of Telecommunications Competition
Appendix 14.1 Double Double Marginalization in a Telephone Network
Appendix 14.2 Tariff Wars After Interconnection

15 Communication for News and Entertainment
15.1 Network Compatibility in Broadcasting
15.2 Broadcasting as a Public Good
15.3 Cable Service
15.4 Convergence of Broadcast, Cable and Telephone, and the Telecommunications Act of 1996

16 Transportation
16.1 Railroad Transportation
16.2 Truck Transportation
16.3 Bus Travel and Urban Transportation
16.4 Pricing the Road Network
16.5 Air Transportation
Appendix 16.1 Major Railroad Legislation
Appendix 16.2 Major Federal Truck, Bus, and Highway Legislation
Appendix 16.3 Major Federal Airline Legislation

17 Energy
17.1 Coal and Nuclear Power
17.2 Oil
17.3 Natural Gas
17.4 Renewable Energy

18 Electricity
18.1 The Electricity Industry
18.2 Organization of the Electricity Industry
18.3 Markets for Power
18.4 Competition in a Restructured Electricity Industry
Appendix 18.1 A Transmission Grid Illustration of Congestion Cost
Appendix 18.2 Illustration of Restructured Electricity Industry


PART III SOCIAL REGULATION
19 Social Regulation of Markets
19.1 Externalities
19.2 Imperfect Information
19.3 Fairness for Workers
19.4 Consequences of Firm Failure

20 Pursuing Social Regulation
20.1 Benefit-Cost Analysis
20.2 Valuing Nonmarket Objects
20.3 Command and Control Means of Social Regulation
20.4 Tax-Subsidy and Property-Right Means of Social Regulation
20.5 Information as Regulation

21 Environmental Protection
21.1 Air, Water, and Land Pollution
21.2 Command-and-Control Means of Protecting the Air
21.3 Pollution-Right Means of Protecting the Air
21.4 Protecting Water and Land
Appendix 21.1 National Ambient Air Quality Standards

22 Worker Protection
22.1 Protection in Markets
22.2 Employment Discrimination Laws
22.3 Occupational Safety and Health Laws
22.4 Retirement Security Laws

23 Consumer Protection
23.1 The Courts and Product Liability
23.2 State Laws
23.3 The Food and Drug Administration
23.4 The National Highway Traffic Safety Administration
23.5 The Consumer Product Safety Commission
23.6 The Federal Trade Commission on Unfair and Misleading Claims
23.7 Consumer Protection for Securities Trading

24 Protecting against Effects of Firm Failure
24.1 Banking Industry Regulation
24.2 Insurance Industry Regulation
24.3 Firm Failure in the Twenty-First Century

References