Assessing Competition Policy: Methodologies, Gaps and Agenda for Future Research

CCP Working Paper 10-19

54 Pages Posted: 20 Dec 2010

See all articles by S. W. Davies

S. W. Davies

University of East Anglia (UEA)

Peter L. Ormosi

Norwich Business School; University of East Anglia (UEA) - Centre for Competition Policy; Compass Lexecon

Date Written: November 10, 2010

Abstract

Research by academics and competition agencies on evaluating competition policy has grown rapidly during the last two decades. This paper surveys the literature in order to (i) assess the fitness for purpose of the main quantitative methodologies employed, and (ii) identify the main undeveloped areas and unanswered questions for future research. It suggests that policy evaluation is necessarily an imprecise science and that all existing methodologies have strengths and limitations. The areas where the need is most pressing for further work include: understanding why Article 102 cases are only infrequently evaluated; the need to bring conscious discussion of the counterfactual firmly into the foreground; a wider definition of policy to include success in deterrence and detection. At the heart of the discussion is the impact of selection bias on most aspects of evaluation. These topics are the focus of ongoing work in the CCP.

Keywords: competition enforcement, evaluation methods, simulation, event studies, difference-in-differences, detection, selection bias, deterrence

JEL Classification: L40, K21

Suggested Citation

Davies, Steve W. and Ormosi, Peter L. and Ormosi, Peter L., Assessing Competition Policy: Methodologies, Gaps and Agenda for Future Research (November 10, 2010). CCP Working Paper 10-19, Available at SSRN: https://ssrn.com/abstract=1723115 or http://dx.doi.org/10.2139/ssrn.1723115

Steve W. Davies (Contact Author)

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

Peter L. Ormosi

Norwich Business School ( email )

Norwich
NR4 7TJ
United Kingdom

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

Compass Lexecon ( email )

United States

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