One of the most famous and outstanding formalizations of the Coase Conjecture is by Gul et al. (J Econ Theory 39(1):155–190, 1986. https://doi.org/10.1016/0022-0531(86)90024-4) peculiarity of their model—as well as nearly all other examinations of the Coase Conjecture, including that by Coase himself—is that it assumes that the monopolist and customers have the same discount rate. I re-examine their model, while relaxing this restriction. Gul et. al. show that, if the (common) discount rate of the monopolist and customers approaches one, then the Coase Conjecture follows. I show that one only needs the discount rate of the customers to approach one for this to be true. I also show a second result: If the customers’ discount rate is fixed at a value less than one, while the monopolist’s discount rate approaches one, then the Coase Conjecture is guaranteed not to follow.

The 2023 Merger Guidelines devote a section to mergers that eliminate potential competition. This is an important contribution because agency guidelines have not discussed the subject in detail for almost 50 years. The new Guidelines follow the traditional distinction that has been upheld in the courts between a merger’s effects on incumbent responses to perceived potential competition and the potential effects of actual entry. Antitrust enforcement should assess both possible aspects of potential competition in an integrated fashion because harm from a merger occurs not infrequently from the elimination of actual potential competition; and when the elimination of perceived potential competition has an effect, it often occurs along with and as a consequence of the elimination of actual potential competition. Economic studies suggest that the benefits of perceived potential competition are less than some courts have assumed and that the benefits of actual potential competition are greater. Rather than focusing solely on the probability of harm from the elimination of a potential entrant, antitrust enforcement should adopt a sliding scale that takes into account the magnitude of the benefits for consumers or suppliers if entry is successful. Mergers with potential and nascent competitors can be harmful even if the probability of actual entry absent the merger is small.

I examine developments in the application of performance-based regulation (PBR) to electricity distribution and transmission in the United States. Applications of comprehensive PBR to electricity distribution had been slow to diffuse in the U.S. prior to roughly 2000. PBR mechanisms are now being applied more frequently to electricity distribution, which reflects the changing structure of the electric power industry and the increasing obligations that are being placed on electric distribution companies. The new obligations are a consequence primarily of aggressive targets for decarbonizing the electricity sector in nearly half the states and the goal of using “clean” electricity to electrify transportation, buildings, and other sectors. PBR should be viewed as a set of “building blocks” that can be adopted in various combinations and should recognize that PBR and traditional cost-of-service regulation (COSR) are properly viewed as complements rather than substitutes. Recent reforms in the regulation of distribution companies in Great Britain—“RIIO”—have been influential in the U.S. The main reforms contained in RIIO are discussed. There has been essentially no application of PBR by the Federal Energy Regulatory Commission (FERC) to owners of transmission assets or to independent transmission operators. FERC has applied targeted incentives to encourage investment in transmission facilities and membership in independent system operator organizations. However, the regulation of transmission rates relies primarily on COSR in the form of formula rates and has poor incentive properties. Regulation of independent system operators is a challenge because they are non-profit organizations with no equity to put at risk. Reforms here are suggested.

This paper proposes a competition theory to explain the role of automobile dealers’ investment in a vertical contract with manufacturers. Dealer contracts specify manufacturer-suggested retail prices and elements of dealer quality. Dealer quality investments require minimum financial capital where manufacturers impose these limits on dealers. The required dealer investment screens for qualified dealers and incentivizes the desired dealer quality. The prediction is that promotional services, prices, and gross returns are greater for high-quality brands than that for standard-quality brands. To test the theory, we collected data on auto dealers in China in June 2015 for an empirical analysis. Our findings support these predictions: Dealer investment (registered capital) is positively correlated with brand average product prices. In addition, the registered capital is higher when the aggregate demand is greater since high demand increases returns, which induces dealers to increase their investment.