Economic theory suggests that oligopolies — industries in which a few firms dominate without much competition — lead to increases in price and reductions in output. On a broader scale, the capacity of Facebook’s platform to spread innovation throughout the economy means that benefits from technological advances accrue faster and more broadly than they would in the hands of a start-up. Research from Schmalz’s team estimates that U.S. airfares are, on average, 3% to 7% higher than they would be without overlapping institutional-investor ownership. We accept APA, Harvard, Chicago, MLA, and any other common citation method. We jointly organize the Essay competition with HUEA, and we also publish the … A slowdown in business dynamism means that entrenched firms have less to fear from upstarts; as a result, the economy suffers as innovation slows and job growth stalls. The Farmington Economics A Team won the 12th Annual Harvard Pre-Collegiate Economic Challenge on Saturday, April 1. Ph.D. in Economics. As writer Mark Rogowsky recounted in Forbes, “Within a year, T-Mobile hired John Legere as its new CEO and he threw out the business-as-usual approach. Prices. ", The Agenda for the Next Generation of Health Care Information Technology, A Recovery Squandered: The State of U.S. Competitiveness 2019, NEJM Catalyst Innovations in Care Delivery. “Most firms are actively engaged in protecting their source of competitive advantage through a mixture of innovation, lobbying, or both,” says Luigi Zingales of the University of Chicago. According to James Bessen of Boston University, the increasing share of revenue captured by the top firms in industries outside of high-tech is explained by those firms’ adoption of proprietary, mission-critical information technology: They’re bigger because they’re better. With scholarly caution, he noted “a moderate but continued increase in aggregate concentration.” The Economist, using U.S. Economic Census data, found a similar trend. The most famous examples are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. The short answer: It’s complicated. To the extent that firms are being driven to innovate, there is little to worry about. We’ll never know what TBH or Halli Labs or Orbitera or Instagram or WhatsApp or Oculus VR might have become had Facebook not absorbed them — or what companies might have been started had prospective founders not figured that it would be impossible to compete with Facebook. Consider beer. But does that mean there is less competition or that consumers are worse off? British library research papers reflective essay vocabulary, common app statement vs essay root cause analysis essay example competition economics essay Harvard. (Their clout caught the attention of European regulators long ago.) Innovation superstars like Google have created winner-take-most markets largely by exploiting network effects, not through predatory behavior. Sharat Ganapati of Dartmouth, for instance, looks at data from 1972 to 2012 and concludes that increased concentration in manufacturing is correlated with higher prices, which is consistent with declining competition, but also with stable output, which is not. In remedying the harmful effects of industry consolidation and declining competition, an obvious place to start is antitrust regulation and enforcement. States generally don’t recognize credentials issued by other states, making it hard for licensed workers to move across state lines and protecting existing license holders in any state. The more lenient approach relied on three ideas: that harm from increased concentration had to be weighed against the efficiencies to be achieved, that horizontal mergers between competitors were harmful only if they led to less output, and that vertical mergers between supplier and buyer generally were not a problem. Quidsi struggled, flirted with Walmart, but eventually sold itself to Amazon. Consider the wireless telephone business. Research Data Management @Harvard Gabriel Chodorow-Reich is an assistant professor of economics at Harvard. “Although provider concentration could produce efficiencies that benefit purchasers of health care services, the evidence does not point in that direction,” Berkeley’s Brent Fulton concludes in a 2017 review of the literature. The National Economics Challenge (NEC) is the country’s only economics competition of its kind for high school students. It wasn’t. Alberto Alesina was a leader in the field of Political Economics and has published extensively in all major academic journals in economics. CAMBRIDGE, MA – The Harvard Environmental Economics Program has, for the eleventh consecutive year, awarded three prizes to Harvard University students for the best research papers addressing a topic in environmental, energy, or natural-resource economics – one prize each for an undergraduate paper or senior thesis, master’s student paper, and doctoral student paper. Ordering multiple books? Issues such as the environment, taxation, and income distribution are … Today, profits are up in industries in which a shrinking number of players have a growing share of the business. Consider Amazon’s alleged use of below-cost pricing to pressure and ultimately acquire a potential competitor. But even as the number of retailers starting up and dying off plunged, the industry became more productive. Enquiries on the LSE SU Economics Essay Competition should be sent to economics@lsesu.org. In most (though not all) cases, the data points to a lack of competition. Indeed, the power of new tech giants to use their potent networks and the vast amounts of data they collect to thwart competition is one of the biggest challenges facing antitrust authorities today. This line of thinking is controversial. And regulators need to pay more attention to protecting economic vitality and consumer well-being — and less to industry lobbyists. California’s Board of Barbering and Cosmetology requires 1,600 hours of education and hands-on training before a person can take the licensing exam, and another 3,200 hours of apprenticeship and 220 hours of related training are required for licensure. This course offers an introduction to the market system, emphasizing economic interactions among individuals, business firms, and government. In 2011, AT&T sought to acquire a struggling competitor, T-Mobile USA, in a $39 billion deal that would have reduced the number of major competitors in the industry from four to three. “The diminished attention to mergers involving somewhat lower market shares and concentration appears to have resulted in approval of significantly more mergers that prove to be anticompetitive,” he wrote in a 2015 book. Porter, Michael E. "Clusters and the New Economics of Competition." As the famed economist Adam Smith warned, corporations continue to behave in ways that seek “always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor.” One way companies do this is by requiring workers to sign noncompete agreements. Evidence that there’s too little competition is accumulating. Harvard Kennedy School Library The HKS Library specializes in supporting research in politics, public policy, international development and other social science/business/economics topics of interest to the Harvard Kennedy School community. The number of jobs created by businesses less than a year old dropped from a peak of 4.7 million in the late 1990s to 3 million in 2015. So are industry leaders heroes or villains? When enforced, these agreements inhibit a worker’s ability to switch jobs and constrain the ability of new firms to hire talent. Probably a bit of both. Big firms account for higher shares of industry revenue and are reaping historically large profits relative to their investment. The 2017 settlement allows Hikma to begin marketing the generic version only after January 1, 2023. The worrisome aspects of increasing industry consolidation can’t be addressed solely through antitrust enforcement. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. And that does happen — sometimes. Please note: Due to COVID-19, the Economics Department is allowing concentrators in the Classes of 2021, 2022, and 2023 to count more Harvard Summer School Classes towards the Economics concentration. It is time for antitrust authorities to renew their scrutiny of traditional mergers. We offer a primary concentration and a secondary field. It is time for antitrust authorities to renew their scrutiny of traditional mergers. It tests micro and macroeconomic principles as well as knowledge of the world economy. Measured against GDP, corporate after-tax profits are almost double what they were 25 years ago — and higher than at any time since World War II — yet business investment as a share of GDP is up only 13% over the same period. Mounting evidence, however, strongly suggests that harmful forces are also at play. For example, it took Hikma Pharmaceuticals nearly seven years of litigation to get what it needed to produce, in accordance with REMS restrictions, a generic version of Jazz Pharmaceuticals’ major product, Xyrem, a $1-billion-a-year drug used to treat narcolepsy. Consider Facebook and its 2017 acquisition of TBH (for “To Be Honest”), a mobile app popular with teenagers that allows them to anonymously answer questions about their friends. The makers of those drugs, in some instances, cite the restrictions as a reason not to supply a generic maker with a sample to recreate the drugs. Competitive advantage lies increasingly in local things—knowledge, relationships, and motivation—that distant rivals cannot replicate. In fact, in a dramatic change from the late 1990s, the Organization for Economic Cooperation and Development says the U.S. now regulates product markets more heavily than many developed economies including Australia, Canada, France, Germany, and Japan. His research lies primarily within this field, and studies how firms bargain, contract and form supply relationships in imperfectly competitive markets. Below is a list of in-print works in this collection, presented in series order or publication order as applicable. Using data for all publicly traded U.S. firms from 1950 to 2014, Jan De Loecker of Princeton and Jan Eeckhout of University College London found that markups rose from about 18% in 1980 to 67% in 2014. Louisiana requires florists to be licensed. "Economic Competition" is a descriptor in the National Library of Medicine's controlled vocabulary thesaurus, MeSH (Medical Subject Headings).Descriptors are arranged in a hierarchical structure, which enables searching at various levels of specificity. Many also have dissertation committees that include faculty members of the economics department.We encourage tho… Clearly, industry concentration is on the rise. The exam will not take place in-person on the Harvard campus this summer. In a healthy economy, companies continually are born, fail, expand, and contract, while new jobs are created and others are destroyed. Seen through the villain lens, however, Facebook’s relentless swallowing up of promising young firms effectively squashes the potential of upstarts to become competitors. It is the only electricity market design that integrates Even-more-complicated issues will arise as the economy evolves. With waning competitive pressure, productivity growth slows, wages stagnate, and the gap between winners and losers widens. The best way to discern if increasing concentration is worrisome economically is to look at profits, investment, business dynamism, and prices. Lately, though, declining dynamism has spread to the tech sector. Economic geography in an era of global competition poses a paradox. From 2009-2010, he served as an economist on the White House Council of Economic Advisers. The explosion of state occupational licensing rules also harms both workers and new entrants. The tech giants pose unique challenges, but they also represent just one piece of a broader story: a troubling phenomenon of too little competition throughout the U.S. economy. Despite the proliferation of craft breweries, two producers dominate the U.S. market: Anheuser-Busch InBev (Beck’s, Budweiser, Corona, Michelob, Stella Artois) and MillerCoors (Blue Moon, Coors, Miller, Molson). Although competition is stiff on the most heavily traveled air routes, 97% of routes between pairs of cities have so few competitors that standard antitrust metrics would deem them “highly concentrated.” In 1990, 65% of hospitals in metropolitan areas were “highly concentrated.” By 2016, 90% were. By 2017, competition among wireless carriers was so stiff that Federal Reserve Chair Janet Yellen cited falling prices for cell phone service as a cause of low inflation. The research on whether common ownership harms competition may be inconclusive, but the work is increasingly vital as the stakes in major companies held by large institutional investors continue to rise dramatically. But in practice, location remains central to competition. The promise of a generous payout is a huge incentive to innovative entrepreneurs. They find a similar pattern in banking. High and rising profits in an increasingly concentrated market are typically a sign of lessening competition and increased market power by dominant firms. regulators and policymakers have more work to do. Should evidence mount that competition is suffering because of this trend, cross-ownership by institutional investors should take its place alongside antitrust and regulation as a lever in managing the troubling decline in competition across the U.S. economy. Despite their undeniable popularity, Apple, Amazon, Google, and Facebook are drawing increasing scrutiny from economists, legal scholars, politicians, and policy wonks, who accuse these firms of using their size and strength to crush potential competitors. Michigan requires 1,460 days of training for athletic trainers, but only 26 days for emergency medical technicians. Global Case Competition Participants, In the last year, the COVID-19 pandemic has changed our lives. I study the economics of competition and other topics in industrial organization using a combination of theory and data. To learn more about Ec, please peruse all the info on this website: See our Fall 2020 Key Dates. By 2012, Amazon had begun raising prices and had slashed the benefits of Amazon Mom. In the U.S., the rate of birth of new firms (as a percentage of all firms) fell from above 13% in the late 1980s to around 8% in 2015, according to the most recent official data. And BlackRock is hardly the reincarnation of John D. Rockefeller; the firm is managing other people’s money. Early in his tenure as President Trump’s FDA commissioner, Scott Gottlieb vowed to change the REMS rules to prevent drug makers from using them to thwart generic competition and in November announced a preliminary plan to do so. This motivating and fun team learning experience begins with competitions at the state level. That’s more worrisome, Haltiwanger says, because it portends slower productivity growth. TBH is only one of more than 60 such acquisitions by Facebook since 2010. Melissa Dell wins 2020 Clark Medal Harvard economist’s work focuses on the lasting effects that conflicts, economic conditions, and institutions can have on a society April 28, 2020 American economy on the bubble In the first quarter of 2017, Berkshire Hathaway, BlackRock, Vanguard, and Primecap owned a combined 23% stake in Delta, 29% in United, 31% in American, and 38% in Southwest. Despite the proliferation of craft breweries, four brewers hold nearly 90% of the U.S. beer market. Gabriel received his Ph.D. from the University of California at Berkeley in 2013. Economics & Business Search Results: 894 found (sorted by date) Click on a column heading to sort search results by title, author, etc. From corporate finance, industrial organization, and international business, to markets, competition, and government regulation, HBS doctoral students in Business Economics delve into some of the most pressing and relevant topics in the field of economics through the practical lens of business. The government’s approach to antitrust violations is due for an overhaul. Economics for Managers takes you inside a growing online retailer, an events ticket broker, a multinational publishing company, and other firms evaluating market demand, wrestling with pricing strategy, and looking to identify ways to differentiate themselves in the marketplace. Their research also suggests that when index funds and other institutional investors hold stakes in all the big firms in an industry, they are less likely to be activist shareholders, thereby entrenching incumbent managers and breeding inefficiencies. Please see the Economics Summer School webpage. Harvard economics essay competition 2020 Better Tomorrows supports youth, adult, and senior residents of affordable housing communities and their neighboring communities. Welcome to Undergraduate Economics at Harvard! If we’re slow to take action to bolster competition — perhaps because incumbents successfully wield their power or because of a distaste for regulation of any sort — we risk diluting the dynamism of the economy and restricting the flow of innovations and new ideas, darkening the prospects for our children and grandchildren. ** Read the Fall 2020 DUS Letter from our Director of Undergraduate Studies, Prof. Jeffrey Miron. But in the same year, FTC sought to block a merger between Steris and Synergy Health, the number two and three companies in the health care facility-sterilization business. Economists are trying to understand whether this is necessarily a bad thing for competition. In an eyebrow-raising 2017 study, Princeton’s Alan Krueger and Orley Ashenfelter found that 58% of major chains (Burger King, Jiffy Lube, H&R Block, and dozens more) restrict and sometimes prohibit one franchisee from hiring workers away from another, to the obvious detriment of people seeking to change jobs. John Haltiwanger, a University of Maryland economist, notes that the decline in dynamism in the U.S. originated in the retail sector in the 1980s and 1990s. How about when a big firm swallows a tiny firm that might have grown into a mighty oak? The FTC decided that it wouldn’t, and the merger went through. The notion was to spur competition and lower prices, discouraging the practice of some audiologists of bundling an exam with the purchase of a hearing aid. CHANGES TO 2020 REGISTRATION GUIDELINES. Although the United States doesn’t regulate pharmaceutical prices, as most rich countries do, it offers makers of brand-name drugs patent protection, periods of exclusivity, and other ways to recoup their investment in expensive research that produces new drugs.

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