EMEA THE ANALYSIS

Economic analysis can clarify even the most intractable issues, to inform better decisions. Here we bring the best that economics has to offer without bias: setting out what is and isn’t known, and what needs to be considered when there is no consensus.

Joe Perkins

FROM THE EDITOR

Joe Perkins | Senior Vice President and Head of Research

In The Analysis, we consider the complex challenges that businesses and policymakers face, and demonstrate the light that economic analysis can shed on them – albeit partially – to inform better decisions and advance important debates.

In this edition – our second collection of articles – we provide four examples where sophisticated analytical techniques help to clear up confusion and illuminate what is really going on.

IN THIS ISSUE

How to better assess whether sustainability agreements are beneficial

How to better assess whether sustainability agreements are beneficial

Nadine Watson | March 22, 2022

What should competition authorities do when an agreement between competitors would both promote sustainability and restrict competition? In this article, Nadine Watson explains that – even within the consumer welfare framework – authorities can already support more sustainability agreements. Drawing on lessons from environmental economics, she demonstrates that the apparent tension between consumers’ interests and the environment is often a failure in analysts’ methodology, not in consumers’ values.

What’s the better approach for estimating the pass-on effect in antitrust damage cases?

What’s the better approach for estimating the pass-on effect in antitrust damage cases?

Christopher Milde, Miguel de le Mano | March 22, 2022

For estimating the pass-on effect in antitrust damages cases, the EC Guidelines distinguish two empirical approaches: the comparator approach and the pass-on rate approach. In our view, its clear preference for the comparator approach is unwarranted; in many common and realistic scenarios, the pass-on rate method should be more feasible and give rise to more reliable results.

Using Natural Language Processing in competition cases

Using Natural Language Processing in competition cases

Rashid Muhamedrahimov | March 22, 2022

In competition proceedings, dozens of hypotheses require testing. But the data to analyse these questions is often not feasibly available. Natural Language Processing is changing that. NLP is a powerful and exciting area of data science that allows us to extract information from textual sources systematically, building datasets that were prohibitively costly to analyse with traditional techniques, or impractically time consuming.

Assessing vertical integration between hospitals and insurers

Assessing vertical integration between hospitals and insurers

Carlos Noton , Angelos Stenimachitis | March 22, 2022

The effects of vertical integration can vary and often depend on the specific setting of a merger. Carlos Noton and Angelos Stenimachitis set out how these should be assessed in transactions involving healthcare providers and insurers – which exhibit additional forces to the typical vertical integration case – and discuss the factors that determine their impact on consumer welfare.

OUR PHILOSOPHY

Rigorous analysis can establish the facts: revealing what is true and what is false.

However, analysis rarely removes all ambiguity. It can pose new questions and leave others unanswered. Sometimes ambiguity may be inescapable; in which case, decisions should reflect that. Other times, further discussion and study will clarify matters. We believe that ambiguity requires more thought and analysis, not less.

In The Analysis, we aim to describe the facts on which we should agree and also set out the issues on which reasonable people disagree. As such, the views expressed here are the authors’ only and do not necessarily represent the views of Compass Lexecon, its management, its employees, or its clients. The authors will also state if third parties provided financial support for the analysis described.