My colleague Danny Sokol has posted An Empirical Evaluation of Long Term Advisors and Short Term Interventions in Technical Assistance and Capacity Building to SSRN. The abstract for the paper, which is co-authored by Kyle Stiegert, follows:

Technical assistance to improve the capacity of regulatory agencies around the world remains a key priority for international aid efforts. Technical assistance is critical to younger antitrust agencies because more effective agencies can protect consumers against anti-competitive conduct. Beginning in the 1990s, the rapid adoption of antitrust laws and development of agencies to interpret and enforce these laws has transformed the competitive landscape in many countries. Indeed, more than half of the countries with an antitrust legal framework enacted antitrust laws in the past 15 years. Many of the newer antitrust agencies are not as effective as they need to be to improve the well being of consumers and protect against anti-competitive conduct. Consequently, donors have assigned a significant amount of time and financial resources to technical assistance to raise the capacity and effectiveness of these younger agencies. However, quantitative analysis of the impact of this technical assistance remains limited at best. In a previous paper, we undertook a general analysis of antitrust technical assistance. In this paper we focus on what appears to be a particularly important part of technical assistance and capacity building — the use of long term advisors (LTA) and short term interventions (STI).

In 2005, the International Competition Network conducted a survey of antitrust agencies that received LTA and STI services from a wide array of donor agencies. We first perform a descriptive assessment of the survey data. We find LTAs to be more effective than STIs in preparing the agency for tackling work they could not have undertaken previously and in confronting cartels. Most LTA and STI services arrived directly from developed world antitrust agencies and lawyers were superior to economists for STI work while economists tend to perform best as LTAs. In a more general empirical framework, we model the effectiveness of LTA and STI interventions using key survey questions about the initial preparation phase, the ability of the interventions to improve internal tactical qualities of the agency, and the ability of the interventions to improve the agency in its strategic mission. We estimate a three equation seemingly unrelated regression system designed to tease out the factors that led to a successful preparation of tactical and strategic technical assistance. The most important findings are related to two structural features of recipient antitrust agencies. Our most prominent finding is that recipient agencies absorb LTA and STI services best when the agency head has a rank of minister or higher and/or when agencies had prosecutorial discretion. At the heart of these agency features is the relative power position of the agency in the domestic political and economic structure. Those agencies with a strong power base seem well positioned to receive the current formatted technical assistance involving LTAs and STIs. Donors should focus on modifying the technical assistance to agencies with less power and should push for stronger agency autonomy and authority. A second prominent finding was that bilateral donor relationships did remarkably better in helping the agencies with their strategic mission. Perhaps bilateral LTA and STI perform better because of a better understanding of the political and economic realities these agencies face or because these donors provide aid through developed world competition agencies. Our suggestion is that multilateral donor agencies work hard to overcome deficiencies that their organizational structure presents to recipient agencies. Overall, our analysis of technical assistance efforts in one field of complex regulation (antitrust) may prove relevant to policies of how to make assistance more effective across regulatory fields.

Thats the opening line of my colleague and Green Bag Editor Ross Davies’ announcement (posted here) that The Green Bag is ready to enter the law school rankings game.  The Deadwood Report (see also Inside Higher Ed) has law school puffery and false advertising in its sights.  The basic idea is that the available information on the relative quality of law schools and faculties is poor and generally not improving (with at least one notable exception).  The methodology is as follows: 

First, download the law school’s web pages containing all pertinent information about the law school’s “faculty,” course schedules and catologs, and individual faculty member pages with vitas and publications.

Second, compile and analyze the data by assigning weights to various types of scholarship or teaching.  For example, Davies notes that publications in the home school’s journal and op-eds will not be weighted.  Also, the weights will favor “well-rounded” faculty members that are active as both scholars and teachers.  This seems to be a bit of a tax on specialization, but that doesn’t bother too much.  The rankings should be easy to reconfigure with alternative weights.  I, for one, would be interested in something like a crude concentration index for publications, e.g. what percentage of scholarship is produced by the top 4, top 8? 

Third, send the preliminary results to the school’s dean, ask for corrections, and provide an opportunity to fix any errors in the school’s website before re-visiting the websites and incorporating modifications.

Leiter is quoted in the Inside Higher Ed piece as warning that “the editors are setting themselves up for a world of grief from the faculties deemed to have lots of ‘deadwood’ and the individual faculty so classified.”  No doubt the grief is coming.  There will obviously be some expected grumbling about The Deadwood Report, its methodology, how different forms of scholarship and teaching are weighted, and even the name!  But like Leiter’s rankings, The Deadwood Report should be a valuable service to consumers of legal education (and law professors).  The Deadwood Report promises to source all data so that those who are not pleased with the way that they weight certain activities or classify faculty members can offer an alternative set of rankings.

Law schools may not like to be held accountable for what is on their websites and in their law porn, but it strikes me as a bit disingenuine to complain too loudly when they are.  If a law school would like to specialize by having some faculty who do research and others who bear the brunt of the teaching load, or have a team of all-stars who can do it all, either of these strategies is fine.  But it strikes me as perfectly reasonable for the law school to communicate truthfully about what it is doing or else be held accountable for its public statements to consumers.  Time to update those websites …

UVA Law School announced today the appointment of esteemed corporate law scholar Paul Mahoney as dean.

Congratulations.  (Corporate law scholar, Sullivan & Cromwell alum, former Second Circuit clerk - it all bodes well…..)

CELS 2008 will be held at Cornell Law School this year September 12 and 13.  Submissions are due by April 15th.  CELS has quickly become one of the best conferences of the year and I’m very much looking forward to attending.  Here’s the conference announcement:

The conference’s objectives are: (1) to encourage and develop empirical and experimental scholarship on legal issues by providing scholars with an opportunity to present and discuss their work with an interdisciplinary group of people interested in the empirical study of law; and (2) to stimulate ongoing conversations among scholars in law, economics, political science, demographics, finance, psychology, sociology, and other disciplines. The conference’s audience will include paper presenters, commentators, and other attendees, and will include many of the nation’s leading empirical legal scholars. The goal is productive discourse on both particular papers and appropriate methodologies. We especially encourage submissions from junior scholars.

See you there.

WSJ Deal Journal reports some important movement on the antitrust and private equity front.  Specifically, Judge Richard Jones (W.D. Washington) granted the defendants’ motion to dismiss in Pennsylvania Avenue Funds v. Borey, dismissing the plaintiffs’ allegations that two private equity firms had violated the Sherman Act by bidding jointly on the target company (Watchguard Technologies) in order to “artificially fix the price … or rig the tender offer bids for WatchGuard shares” after initially submitting independent bids.

Wilson Sonsini, who argued the successful motion, has posted an informative Client Alert summarizing the highlights of the decision.  Apparently, the Court rejected the per se characterization of joint bidding because it recognized the potential for joint bidding to increase rather than suppress competition in some circumstances.  The court found that the bidding arrangement could not survive a motion to dismiss on the alternative rule of reason characterization because ”dozens of other suitors who expressed interest in WatchGuard refused to make bids. . . . The result was a contest for corporate control in which it appeared that there were only two bidders, but the appearance is a mirage. An acquiror who believed that WatchGuard was worth more than [the] bid could have made a topping bid. The agreement between [the funds] would have had no effect on such a bid. Moreover, had WatchGuard’s shareholders believed that the [] bid was too low, they retained power to reject the merger by voting it down.”  Finally, it is worth noting that Judge Jones did find that the bidding arrangement was not impliedly immune from the antitrust laws because of overlapping securities regulations.

Private equity deals have been the subject of a good deal of speculation in antitrust circles in the past several years as bidding arrangements are the subject of pending litigation and have come under the scrutiny of the Department of Justice.  Its just one decision, but this one seems pretty dismal for plaintiffs in these private equity collusion suits.  Judge Jones’ decision seems to suggest that in the post-Twombly world, and with the market definition problems inherent in a rule of reason type case in the “market for corporate control,” plaintiffs are going to have a difficult time surviving the pleading stage without a plausible story that a specific “club deal” is tainted by collusion with a tangible impact on acquisition price.   I just don’t know if that kind of evidence is out there.  Its certainly tough to get without the benefit of discovery.  Anyway, I thought that the “club deal” collusion story was about facilitating tacit or explicit collusion on a series of deals (you don’t bid here, I won’t bid there).  That might be much harder to identify in practice.

But this is not the last of these suits.  It will be interesting to see how the plaintiffs antitrust bar adjusts to this ruling in future cases.

The FTC has filed its primary appellate brief in the Whole Foods case. In essence, the brief asserts two claims: that the district court evaluated the Commission’s request for a preliminary injunction under an overly stringent legal standard, and that the court improperly discounted the Commission’s evidence that a Whole Foods/Wild Oats merger would reduce competition and harm consumers. While the Commission is wrong on both points, this appeal might be a good thing — it could provide the courts (maybe even the Supreme Court!) with an opportunity to do some much-needed house cleaning on merger policy.

Under the FTC Act, the Commission may seek a preliminary injunction whenever it has reason to believe “(1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission, and (2) that the enjoining thereof pending … [judicial resolution of a formal complaint] would be in the interest of the public.” (Because the FTC enforces the Clayton Act’s ban on mergers that “may substantially lessen competition,” the Commission may seek to preliminarily enjoin such mergers.) The statute goes on to say that the petitioned court may grant the preliminary injunction “[u]pon a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such action would be in the public interest….”

The FTC contends, quite correctly, that this standard is more liberal than the traditional equitable standard for awarding a preliminary injunction. But the district court recognized as much. Cutting quotation marks, citations, and parentheticals, here’s how the court construed the FTC’s proof burden (pp. 5-6):

In contrast to the four-part equity standard for the granting of a preliminary injunction in other contexts, in deciding whether to grant preliminary injunctive relief under section 13(b), the court evaluates whether it is in the public interest to enjoin the proposed merger. This standard is broader than the traditional equity standard that is normally applicable to requests for injunctive relief and is consistent with Congress’ intention that injunctive relief be broadly available to the FTC. The FTC is not required to establish that the proposed merger would in fact violate section 7 of the Clayton Act. It is required only to show that it is “likely” to succeed in showing under Section 7 of the Clayton Act that the proposed merger “may substantially lessen competition” or “tend to create a monopoly.” The FTC must show a “reasonable probability” that the proposed merger may substantially lessen competition in the future. The FTC’s burden is not insubstantial, and a showing of fair or tenable chance of success on the merits will not suffice for injunctive relief. To meet its burden to establish its likelihood of success on the merits, the FTC may raise questions going to the merits so serious, substantial, difficult and doubtful as to make them fair ground for thorough investigation, study, deliberation and determination by the FTC in the first instance and ultimately by the Court of Appeals. The FTC does not have to prove that the proposed merger will in fact violate Section 7 of the Clayton Act because the Congress used the words may be substantially to lessen competition to indicate that its concern was with probabilities, not certainties.

That’s a pretty darn deferential standard. The Commission is required to show only that it is “likely” to be able to show that the proposed merger “may” substantially reduce competition.

So suppose a merger proposal presents four equally plausible scenarios — one in which competition is substantially reduced, two in which competition is enhanced (say, because of enhanced economies of scale), and one in which there’s no noticeable change in competition. Suppose, though, that it’s hard to tell the productive efficiencies story — either the theory is hard to follow or the data establishing the likely efficiency gains are hard to produce. In light of this difficulty, there’s a 50% chance that the ultimate factfinder will altogether discount the two enhanced competition scenarios. That means there’s a 50% chance the factfinder will conclude that there are two equally plausible outcomes: one in which competition is substantially reduced, and one in which there’s no noticeable effect on competition. Under these facts, the FTC should win; it has shown that it is “likely” to succeed in showing that the proposed merger “may” substantially reduce competition. Thus, the merger would be barred even though the actual likelihood of anticompetitive effect is only 25%. The district court’s proof standard endorses this FTC-friendly outcome.

So what’s the Commission’s beef with the district court’s proof standard? I suppose the Commission is upset over the statement that “[t]he FTC’s burden is not insubstantial, and a showing of fair or tenable chance of success on the merits will not suffice for injunctive relief.” But surely the Court of Appeals shouldn’t endorse a standard that permits the FTC to prevail as long as it discharges an “insubstantial” burden and demonstrates only that it has a “fair or tenable” chance of showing that competition may be reduced. In the merger context, “preliminary” injunctions are final in fact (the merging parties walk away from the deal if a PI is granted), and most mergers offer at least some good news for consumers in the form of enhanced productive efficiencies (from economies of scale, etc.). Thus, we shouldn’t make it too easy for the FTC to squelch a merger.

Moroever, lowering the PI proof standard from that which the district court employed would create further divergence between the rules applicable to the FTC and those applicable to the other agency charged with pre-merger review, the Department of Justice. Because of some statutory quirks, mergers challenged by the DOJ cannot be effectively thwarted on so slight a showing. The bipartisan Antitrust Modernization Commission recently observed that differences between the two agencies’ pre-merger reviews “can undermine the public’s confidence that the antitrust agencies are reviewing mergers efficiently and fairly.” The AMC recommended (Rec. #26, pp. 141-42) that the standard for granting injunctive relief to the FTC be raised to mirror that applicable to DOJ requests. Any ruling that lowered the FTC’s proof standard below that utilized by the trial court in the Whole Foods case would effect precisely the opposite result.

So how about the FTC’s claim that the district court misevaluated the evidence of likely anticompetitive effect? Wrong again. One of the FTC’s primary assertions here is that the court failed to give credit to various internal documents suggesting that the merger would have an anticompetitive effect. The main such “hot document” was an email Whole Foods CEO John Mackey sent to the board of directors, arguing that the merger would “avoid nasty price wars” in certain markets and would deny conventional grocers the “springboard” they’d need to get into Whole Foods’ market space. Other internal documents suggested, the FTC maintains, that Whole Foods considered itself so unique that it did not compete in the same market as conventional grocery stores. The district court’s 90+ page opinion did not discuss most of this evidence, leading the FTC to charge that the court committed reversible error in discounting “the gold standard of probative evidence” on the merger’s competitive effects.

In fact, it was entirely appropriate for the district court to discount internal hot docs in favor of the cold hard economic data, which showed that there is substantial competitive interaction between Whole Foods and conventional grocery stores and that Wild Oats does not provide a unique constraint on Whole Foods’ pricing. (As the district court explained, the data showed that “Whole Foods prices are essentially the same at all the stores in its region, regardless of whether there is a Wild Oats store nearby.”)

The FTC’s claim that internal documents are “the gold standard of probative evidence” on market definition or a merger’s likely effects is just wrong. Business people routinely make puffing claims about the uniqueness of the product or service they are selling, and it would be naïve to infer from such self-serving claims that the products or services at issue really are so unique that the seller could raise prices above competitive levels without causing buyers to substitute toward alternatives. Whole Foods’ claim to be a “lifestyle retailer” offering “a unique shopping environment” says next to nothing about whether shoppers would really refrain from substituting to, say, a Safeway Lifestyle Market in response to a price increase. Similarly, aggressive “fighting words” in internal communications generally say little about the real purpose of planned conduct — much less the likely effect of such conduct. For example, the inflammatory “avoid nasty price wars” language quoted at the beginning of the FTC’s complaint appeared in a last-minute e-mail that was designed to drum up board support for the Wild Oats merger. One could not infer the true purpose of the merger from this out-of-context snippet and, even if one could, it is effect — not purpose — that really matters. Divining likely effect requires a hard look at economic data rather than consideration of statements lifted out of context.

My esteemed co-blogger, Geoff (along with Marc Williamson) has persuasively criticized the use of “hot docs vs. cold economics” in antitrust enforcement. Manne and Williamson observe that accounting documents, market definition documents, and documents containing “fighting words” frequently give rise to economically inaccurate inferences. They explain:

Business people will often characterize information from a business perspective, and these characterizations may seem to have economic implications. However, business actors are subject to numerous forces that influence the rhetoric they use and the conclusions they draw. These factors include salesmanship; self-promotion; the need to take credit for successes and deny responsibility for failures; the need to develop consensus; and the desire to win support for an initiative or to neutralize its opponents. . . . Simply put, the words and procedures used by business people do not necessarily reflect “economic realities,” and the effort to integrate them further into antitrust analysis is misdirected.

Thus, it was entirely appropriate for the district court to focus on hard economic data — the real gold standard of probative evidence — rather than inflammatory hot docs.

To be sure, the FTC also goes after the district court’s analysis of the economic data. It argues, for example, that the court ignored evidence that “the presence of Wild Oats in a market reduced Whole Foods’ profit margins by .7 percent, storewide.” Come again? This is the sort of evidence that’s supposed to justify the court’s thwarting of a merger in an industry in which scale economies are substantial (so that a larger merged firm can exploit otherwise unavailable productive efficiencies)? First, the relevant consideration is effect on prices, not profit margins; an increase in profit margins can occur when per-unit costs decrease, and one might well expect a “busy” Whole Foods in a non-Wild Oats area to have greater efficiencies (less wasted perishables, etc.) than a less active Whole Foods in an area with a Wild Oats. In addition, the market power-induced price increases leading to a 0.7 percent increase in profit margins are probably really small. In a merger of Whole Foods and Wild Oats, the enhanced market power resulting in these tiny price increases would be accompanied by productive efficiencies (scale economies, etc.) that would likely dwarf the market power-induced price hikes. The net effect (a small increase in market power with a more sizeable increase in productive efficiency) would almost certainly benefit consumers.

And speaking of productive efficiencies, they are never mentioned in the FTC’s appeal or in Prof. Murphy’s expert report. Indeed, Prof. Murphy begins his expert report with the list of questions the FTC asked him to consider (p. 7, par. 21), and nowhere on that list is any consideration of offsetting productive efficiencies — an almost certain result of the merger at issue and a matter the FTC, pursuant to its own merger guidelines, is supposed to consider. In light of this glaring oversight, should the courts be more deferential to the Commission, as it now contends?

It seems, then, that the FTC is wrong all around. Still, I’m glad it’s pursuing this appeal. Merger appeals are rare. When regulators lose a merger challenge, they generally don’t appeal because mergers usually close shortly after the district court rules, and most consummated mergers are quite difficult to undo. When the parties to a merger agreement lose, they usually give up because they know they probably can’t hold the merger agreement together for the duration of an appeal. The result has been a dearth of Supreme Court merger decisions; the last significant one was United States v. General Dynamics Corp., decided in 1974.

There is a good chance the current Supreme Court would agree to hear an appeal of this case if it were to proceed that far. Unlike the Rehnquist Court it succeeded, the Roberts Court has shown significant interest in antitrust matters. Indeed, in the last two terms, the Court decided seven antitrust cases, compared to an average of less than one per year in the 15 years prior to the 2003–2004 term. An appeal of the Whole Foods case would present the Court with the opportunity to do some much-needed house-cleaning on merger analysis. Most notably, the Court could correct some of the unfortunate vestiges of its Brown Shoe decision, which stated that “submarkets” could be defined, in part, according to such “practical indicia” as “industry or public recognition of the []market as a separate economic entity, the product’s peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors.” This unfortunate statement invited litigants and regulators to scour business documents for market characterizations that suit their end. Unfortunately, those characterizations are frequently inaccurate, and, as this case well shows, reliance on business documents rather than econometric evidence often leads to mistakes.

My esteemed co-blogger, Josh, has recently opined that the Roberts Court will hear an appeal of a merger challenge (p. 55 of this article). Whole Foods just could be the case.

My colleague Lloyd Cohen and I are editing a volume for Edward Elgar on Pioneers in Law and Economics.  We’ve collected a dozen or so top notch essays from leading law and economics scholars covering the pioneers in the discipline and their contributions.  I’ll have more details to post about this project in a month or so — including a full list of contributing authors, subjects, and of course, details on how to buy the book!!!  If you’re interested in a preview, Larry Ribstein’s entry, Henry Manne: Intellectual Entreprenuer, and Kate Litvak’s, Frank Easterbrook and Daniel Fischel, are both available on SSRN right now.  As Larry notes in his post, the two essays combined are an excellent guide to the last 40 years of corporate law and economics.

Tis the spring law review submission season (almost, depending on your view)!  This is the time of year where many members of law school faculties wrap up their law review draft articles and begin submitting them to various journals for consideration for publication.  Tomorrow Tulane is having a faculty roundtable on law review publishing, at which we will exchange our ideas on when to submit, how to submit (mail, e-mail, Expresso or otherwise, rounds or otherwise), etc.  In that vein, I am soliciting opinions, thoughts, and anecdotes here, regarding the submissions process.  (If you are a law school faculty member reading this, please consider forwarding this link to your law review editors to see if they have any comments they would be willing to share here regarding how, why, or when they select articles.)

Some topics for discussion here on the blog (or e-mail to me your thoughts if you would prefer not to share them here) (***Note scholars are posting their responses in the “comments” below.):

1.  When do you submit your winter/spring draft to law reviews for publication consideration?  February?  First week of March?  Last week of March?  Never in March?

2.  Do you submit in “rounds,” whereby you submit to certain publications first to gauge their interest, and then submit to different journals beyond that?  If so, how do you determine which journals should be part of your first “round” of submissions?

3.  Do you pull a piece if you do not get a law review placement that you want?  Or do you believe that, if you submit it, you had better be willing to take a placement that you get?

4.  Do you submit your drafts in the traditional manner using the mail, do you e-mail your articles to law reviews, do you use Expresso, or do you use some other service?

5.  Do you judge your colleagues or your peers based on the placement of their law review articles?

6.  Has your “best” article (in your own professional view) received the “best” placement of all your law review placements?  To that end, how do you explain how you scored your “best” placement?

7.  What is the most important tip you would give a junior colleague on your faculty on the law review submission and placement process?

A few months ago I commented on the absurdity of the Feingold-Kyl amendment to the judicial pay raise bill, which appeared to be a thinly veiled attempt to target the George Mason Law and Economics Center and a few others. The absurdity with which I was particularly interested at the time was the fact that events sponsored by the bar association and state governments were exempted and so, because of the high demand for these programs, the likely impact of the amendment on the total number of these programs would be trivial. Rather, I thought it fairly transparent that the intended impact of the bill was not to reduce judicial access to these programs but to favor certain providers over others. There is also the notion that somehow judges are becoming wealthy as a result of these programs or that the programs do not generate social good — but I digress. Back to the update.

John Fund summarizes the state of affairs as they stood on December 17, 2007 quite thoroughly here. For those who need a reminder about the contents of the amendment, Doug Lederman at Inside Higher Ed sums up the bill as it currently stands (and provides a link to the actual text):

First, it would prohibit [judges] from accepting any sort of gift, income or even travel reimbursement from programs designed to educate federal or state judges, except for programs sponsored by a bar association, a judicial association, or a government. (Programs at public universities are exempted from the exemption, and so are barred, as are private colleges.) Feingold’s amendment would also limit to $2,000 the amount that a judge or justice could receive in income or reimbursement from any “single trip or event” sponsored by any entity but a bar or judicial association or a federal, state or local government. Again, public colleges, like private ones, would be subject to the limit, and a judge would have a maximum annual limit of $20,000 in such reimbursements.

As Lederman notes in his column, things have changed. First, the amendment appears to be losing its political legs. The article notes that Senator Kyl, previously a named sponsor, has “vowed to oppose the entire judges’ pay bill if the Feingold amendment stays attached to it.” Next, the American Law Deans Association, led by Northwestern Law Dean David Van Zandt, is speaking out against the amendment in the form of a letter to Senate Majority Leader Harry Reid. The Judical Conference of the United States has also unsurprisingly chimed in against the amendment. I have no idea what political bargain might be struck with respect to the judicial pay raise bill and the Feingold amendment, but I do hope that for the sake of law schools public and private that the amendment will soon disappear and it looks like things are happily moving that direction.

Lederman’s column includes a quote from my colleague and George Mason Law and Economics Center Executive Director Frank Buckley explaining that the LEC “is by no means ideological” and that expressing disappointment that “a highly academic program, which has a list of donors and supporters from all over the political spectrum, gets singled out.” For anyone skeptical of Buckley’s description of LEC program content, please go check out the programs at LEC for yourselves. They really do speak for themselves. But allow me to allow Buckley to speak for them (from his comment on a VC post in 2006, but still pertinent to the discussion):

Does it matter that the Mason lecturers are the leading scholars anywhere, that its readings are posted on its web site, that no one has or could have a problem with them, that people like Larry Kramer, Gordon Wood, John Searle, David Bromwich, Jasper Griffin, Joe Ellis, Cass Sunstein and Marcia Angell lecture for it, that without Mason lecturers the NYRB would have trouble publishing, that lecturers are asked to stay away from hot button topics, that global warming, environmental issues, asbestosis, abortion, tobacco, etc. are simply not mentioned in Mason programs, that no judge has ever complained of the content of the programs or lectures? Does it matter that the programs are academically intensive, that there are no entertainment or hospitality events? Does it matter that judges such as Ruth Bader Ginsburg have praised our programs? And does it matter that Mason programs this year are on subjects as varied as Renaissance Humanism, David Hume, Abraham Lincoln, and the principles of microeconomics? Because if none of that matters, the complaints can be made only by bitter ideologues blinded by an ignorance of or animus against the life of the mind.

*Disclosure: As I’ve noted previously when discussing this topic, I have received summer research money from the LEC in the past.

Luke Froeb gives a short interview on international antitrust, harmonization, China, and all sorts of interesting and timely topics. Towards the end of the interview Luke addresses whether the export of antitrust regulation outside of the United States (and particularly into developing economies) is a good idea. You’ll have to listen to the interview to get Luke’s answer.  But the whole thing is worth a listen.

Microsoft has made a bid for Yahoo, and the Yahoo board of directors is anticipated to use the Nancy Reagan “Just Say No” defense.  I feel like I’m back in the 1980s merger boom. 

Several thoughts:

1.  Rumor has it we are in a recession.  It is likely then that Yahoo stock is currently trading at a price that is not its highest.  Indeed, Microsoft’s bid for Yahoo is basically a big fat memo to Wall Street, in bolded all caps, indicating it (Microsoft) thinks Yahoo is a good buy.  How long before other bidders get the clue and come knocking on Yahoo’s door?

2.  Debt is cheap these days.  Super cheap.  Cheaper than it was in the 1980s when we saw a wave of debt-financed takeovers.  If Yahoo really is a bargain at its current price, other bidders will appear, using a good chunk of debt-financing, if necessary, to make their bids.

3.  If other bidders show up, can the Yahoo board members continue to “just say no” without violating their fiduciary duties?  At least for now, I am of the view that the Yahoo board can easily continue to keep the door to bidders closed.  Yahoo stock traded around $27-ish over the past year, and Microsoft is now offering $31 per share.  Given that, back in Jan. of ’06, when the S&P 500 and the DJIA were both weaker, Yahoo was trading in the vicinity of $40 per share, I have no problem thinking the Yahoo board can embrace their inner Nancy Reagan until a bidder steps forward with an offer well over $40 per share.

4.  Yahoo’s dance with Google is an interesting defensive move, making me think of the white knights, crown jewels, and lock-ups of the days of yore.

5.  Am I the only one who finds it *very* ironic that Microsoft is making a bid for Yahoo only days after AOL Time Warner has made clear it is going to try to undo its mega-merger from seven years ago between AOL and Time Warner?  Note to Microsoft:  It is important to have very specific business justifications – and related business plans – before indulging your urge to merge.

The M&A world seems to be flashing back to the 1980s.  Debt is cheap, private investors are bold, and some mega-mergers from the late 1990s might be perfectly situated for bust-ups.  It is just a matter of time before everyone is wearing parachute pants again.  You heard it here first. 

In yesterday’s Super Tuesday primaries, Hillary Clinton won the two largest contests–California and New York–but the delegate count was close to even (perhaps Clinton even finished slightly behind) because Barack Obama won more states, albeit smaller ones.

The Clinton campaign argues that Clinton’s victories in larger, delegate-rich states suggest that she would be a more viable candidate than Obama in the general election. But does that conclusion really follow?

I don’t see why. States that are heavily Democratic, whether large or small, are very likely to vote for whoever is running on the Democratic ticket in November. The candidate who gives Democrats the best hopes of winning in the general election is the one who will do better among moderates, independents, and Republicans. So the fact that Clinton won in heavily Democratic states such as New York and California does not seem to be a very meaningful statistic for assessing whether she or Obama would do better in the general election. To the contrary, the candidates’ relative performance in more politically balanced or conservative states (regardless of size) would seem like a better indicator of general electability, especially in such states where independents and Republicans are permitted to participate in the Democratic primary. Judging by that measure, Obama is the candidate who seems more likely to do better in the general election.

To be sure, the campaign is far from over and much can still happen to influence voter opinion in the remaining primary contests and in the general election. My goal here is simply to debunk some spin by the Clinton campaign that seems to be based on an erroneous statistical inference.

The Economist (HT: 26econ.com) sketches out an interesting theory on the proposed Microsoft-Yahoo merger:

The only grounds on which a trustbuster could plausibly oppose Microsoft buying Yahoo!—that it is possible to exercise monopoly power in online search and advertising—surely apply even more strongly to Google. Indeed, some antitrust experts are surprised that Google has not already come under serious assault from the trustbusters, especially because, as Mr Ballmer points out, the “one player” has been “consolidating its dominance through acquisition.”

Indeed, even if Microsoft believed that it would be prevented from buying Yahoo! on antitrust grounds, it might make sense to push for the deal, if only to force the antitrust authorities to take a serious look at issues of market power in the online search and advertising market, which would inevitably lead them to Google.

The FTC recently released its agenda for its upcoming public workshop on February 12 on “Unilateral Effects Analysis in Litigation.”  The announcement motivates the conference as follows:

Among economists, unilateral effects is a widely accepted theory of competitive harm. Yet, the federal antitrust agencies have experienced limited success litigating differentiated product cases in district courts under unilateral effects theory. Calling together leading lawyers and economists to discuss these issues is a central component of Chairman Majoras’ efforts to refine the Commission’s ability to explain and prove cases based on unilateral effects theory.

The agenda is available here.