ANDREEA COSNITA-LANGLAIS
Maître de conférences avec HDR
2024-10
Product Liability Influences Incentives for Horizontal Mergers
Andreea Cosnita-Langlais, Tim Friehe, Eric Langlais
- Abstract
- This paper shows how product liability rules influence merger incentives. Consumers’ misperception of product risk critically influences which liability rule induces the strongest merger incentives. When consumers overestimate product risk, merger incentives under negligence and strict liability are similar and weaker than under no liability. When consumers underestimate product risk, merger incentives under negligence are weaker than those under strict liability but stronger than those under no liability.
- Mot(s) clé(s)
- Liability; Merger; Cournot; Market Structure
2022-20
Incentives to differentiate under environmental liability laws : Product customization and precautionary effort
Andreea Cosnita-Langlais, Eric Langlais
- Abstract
- We endogenize location/product specification choices in a spatial Cournot duopoly on the linear market, when firms' output entails an accidental harm to the environment. Under a strict liability regime, the equilibrium involves no differentiation when the expected harm is low enough. This outcome is suboptimal, and identical to the spatial pattern obtained under a no-liability regime. With larger harm, the equilibrium displays some dispersion/product differentiation, the degree of which is increasing with the level of harm towards the first best locations/product choices. Our results are robusts when allowing for firms' investment in environmental measures. Moreover, we show that vertical/care differentiation occurs whenever horizontal product differentiation arises. Finally, we show that under a negligence rule, firms always comply with the due care level, but the equilibrium involves no differentiation, either horizontal/product or vertical/care.
- Mot(s) clé(s)
- Cournot competition, spatial model, strategic location, product choice, horizontal differentiation, vertical differentitation, environmental liability, strict liability, negligence.
2022-18
Endogenous market structures, product liability, and the scope of product differentiation
Andreea Cosnita-Langlais, Eric Langlais
- Abstract
- The paper considers how product liability may shape firm size, product specification choices and market structure. We introduce a spatial Cournot duopoly on the linear market, where firms make an initial decision of product differentiation, then invest in precaution, before competing in quantity. Our main results are fourfold; 1) with full coverage of the market by the duopoly, there exist two equilibria (in pure strategies): central agglomeration (which is stable for low liability costs), and dispersion (which is stable for not too large liabiliy costs); 2) for larger liability costs, a mixed market structure duopoly/monopoly sustains a unique equilibrium with product differentiation; 3) this equilibrium enables a scope of differentiation higher (smaller) than the full duopoly (the social optimum); 4) the impact of liability costs on firms size and profits is complex, since it depends on the impact on both product differentiation and market structure. Finally, we show that consumer surplus and social welfare are both higher under the mixed market structure than under the full duopoly in an equilibrium with product differentiation.
- Mot(s) clé(s)
- horizontal differentiation, Cournot competition, spatial model, endogenous market structures, product liability, strict liability, negligence
2021-37
Learning by litigating: An application to antitrust commitments
Andreea Cosnita-Langlais, Jean-Philippe Tropeano
- Abstract
- This paper examines the impact of commitment decisions on the efficiency of antitrust enforcement. We discuss the optimal use of commitments considering past rulings as a source of knowledge to better assess future similar antitrust cases. Our framework combines two key effects: the deterrence of the anticompetitive behavior by the different enforcement regimes, and the dynamic perspective through litigation as a source of learning. We show that if the level of penalty is high enough, the antitrust authorities undervalue the dynamic informational benefit of litigation and tend to over-use commitments.
- Mot(s) clé(s)
- antitrust, commitments, deterrence, legal learning
2019-21
Market collusion with joint harm and liability sharing
Florian Baumann, Maxime Charreire, Andreea Cosnita-Langlais
- Abstract
- When it is impossible to identify ex post the producer of a product causing harm or the damage caused is indivisible although caused by multiple injurers, courts must apportion the total damage among tortfeasors. In this model we examine how such liability sharing rules affect the likelhood of tacit collusion. For this we use a standard Cournot oligopoly model where firms are collectively held liable for joint harm inflicted on third parties. The damage caused may be either linear or cumulative in total industry output. With repeated market interaction and grim strategies, we investigate the sustainability of collusion to derive some policy implications.
- Mot(s) clé(s)
- Cournot oligopoly, liability sharing rules, market collusion
2018-3
Upward Price Pressure in Two-Sided Markets: Incorporating Feedback Effects
Andreea Cosnita-Langlais, Bjørn Olav Johansen, Lars Sorgard
- Abstract
- In two-sided markets it is important to consider feedback effects following a merger, i.e. how a price change on one side of the market affects the price change on the other side of the market. Affeldt et al. (2013) introduced the Upward Pricing Pressure (UPP) for two-sided markets, and we extend their approach to take into account such feedback effects. We then discuss the implications of our results for the assessment of two-sided mergers.
- Mot(s) clé(s)
- merger assessment, two-sided markets, Upward Pricing Pressure
2015-31
Enforcement of Merger Control : Theoretical insights for its Procedural Design
Andreea Cosnita-Langlais
- Abstract
- This paper reviews the theoretical underpinnings of the main procedural choices for merger control enforcement. At each relevant stage we highlight the economic trade-offs behind the corresponding procedural choices: mandatory vs voluntary pre-merger notification, ex ante vs ex post merger review, and the type of decision eventually made, binary or not. The paper also identifies the missing debates that still need formal treatment. Our study provides insight for the optimal procedural design of merger control, and as such may be useful to understand the different choices made by the various jurisdictions for merger policy enforcement.
- Mot(s) clé(s)
- merger control, enforcement, procedural design.
2015-3
Institutional Design and Antitrust Evidentiary Standards
Andreea Cosnita-Langlais, Jean-Philippe Tropeano
- Abstract
- The purpose of this paper is to study the relative impact of public and private competition law enforcement on antitrust liability. We develop a model with asymmetric information during trial, where the number of cases filed depends on the amount of damages awarded and on the standard of evidence applied either by the public authority or by the judge. Our model predicts that higher damages result in a higher standard of evidence, which is not always welfare improving. We also show that public enforcement better incentivizes pro-competitive practices by allowing a lower standard of evidence. This may lead the public enforcement to outperform the private enforcement.
- Mot(s) clé(s)
- Antitrust, public and private enforcement, evidentiary standard.
2014-29
Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?
Andreea Cosnita-Langlais, Lars Sørgard
- Abstract
- This paper deals with the enforcement of merger policy, and aims to identify situations where the introduction of remedies can lead to a lower welfare. For this we study how merger remedies affect the deterrence accomplished by controlling mergers, and determine the optimal frequency of investigations launched by the agency. We find that when conditional approvals are possible, it may be harder to deter the most welfare-detrimental mergers, and the agency might have to investigate mergers more often. The resulting welfare from merger control can indeed be lower than without remedies.
- Mot(s) clé(s)
- merger control, merger remedies, enforcement, deterrence.
2013-22
Ex post or ex ante? On the optimal timing of merger control
Andreea Cosnita-Langlais, Jean-Philippe Tropeano
- Abstract
- We study the optimal timing of merger control by comparing the pre-and post closing enforcement. Mergers have both pro- and anticompetitive effects, and the parties' (the agency and the merging firms) veri able information on them is endogenous: it depends on the timing of the merger control, as well as on some investment in evidence production. The ex post enforcement turns out optimal whenever the costs of providing veri able information on both efficiency gains and market power are sufficiently low, regardless of whether the fi rms know ex ante or not their true merger type.
- Mot(s) clé(s)
- merger control, competition policy, evidence production
2011-18
Fight Cartels or Control Mergers? On the Optimal Allocation of Enforcement Efforts within Competition Policy
Andreea Cosnita-Langlais, Jean-Philippe Tropeano
- Abstract
- This paper deals with the optimal enforcement of the competition law between the merger and anti-cartel policies. We examine the interaction of these two branches of the competition policy given the budget constraint of the competition agency and taking into account the ensuing incentives for firms’ behavior in terms of choice between cartels and mergers. We are thus able to conclude on the optimal competition policy mix. We show for instance that to the extent that a tougher anti-cartel action triggers more mergers taking place, the public agency will optimally invest only in control fighting for a tight budget, and then in both instruments as soon as the budget is no longer tight. However, if the merger’s coordinated effect is taken into account, then when resources are scarce the agency may optimally have to spend first on controlling mergers before incurring the cost of fighting cartels.
- Mot(s) clé(s)
- competition law enforcement; antitrust; merger control; anti-cartel policy
2008-42
Horizontal market concentration: Theoretical insights from the spatial models
Andreea Cosnita-Langlais
- Abstract
- This paper aims to further advance the study of horizontal mergers by critically reviewing the theory on spatial models that may be used for the analysis of horizontal market concentration. We examine the incentives conveyed by locations for undertaking merger and merger-related strategies, as well as the impact of merger on strategic location choices. Thereby this paper highlights the two-way relationship between market concentration behavior and firm location.
- Mot(s) clé(s)
- geographic and product space, strategic location, horizontal market concentration, merger control
2008-10
Settlement in Merger Cases: Remedies and Litigation
Bertrand Chopard, Thomas Cortade, Andreea Cosnita-Langlais
- Abstract
- This paper performs a pre-trial settlement analysis for the negotiation of asset
divestitures in merger control cases. Taking into account the asymmetric information
between the competition agency and the merging firms concerning the true competition
impact of the merger, we examine the impact on the likelihood of settlement
divestiture and the divestiture amount in equilibrium of various factors, such as the
transfer rate of the merger's cost savings, the severity of the appeal court, as well as
the bargaining power of the merging partners in the sale of the divested assets. - Mot(s) clé(s)
- out-of-court settlement, merger control, divestitures, asymmetric information
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