Essays on Competition Policy

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  • On September 18th, Riku Buri will defend his doctoral dissertation titled “Essays on Competition Policy” at Aalto University.

    Buri’s dissertation consist of an introductory chapter and three empirical essays on the economics of competition policy. The introductory chapter provides a summary of the essays.

    The first essay studies the use of statistical methods to detect cartels. A key challenge in cartel enforcement is identifying collusive agreements.  Using data from two Nordic procurement cartels, the essay demonstrates that statistical screening methods with modest data requirements can be useful for competition authorities in detecting collusive agreements. First, the essay documents that during the cartel the distribution of bids was considerably different than after the cartel. In the second part of the essay, two previously suggested cartel detection methods, which are based on the distribution of bids, are tested on the data. Both methods find more evidence of suspicious behavior during the cartel.

    The second essay studies the deregulation of the Finnish interurban bus industry. The essay documents that after deregulation, the number of operators increased particularly on routes connecting large and mid-sized cities. Consistent with the evidence on entry, the essay finds that prices decreased on routes connecting large and mid-sized cities, while on routes connecting smaller cities, no significant change in price is found. The essay also studies how the reform affected the long-distance railway market and finds that increased intermodal competition also resulted in lower prices on the railway market. The paper contributes to the literature on the effects of deregulation on the transport sector.

    The final essay studies the effects of acquisition on the Finnish private physician market. The Finnish private healthcare market has experienced rapid consolidation, with national healthcare chains making hundreds of acquisitions in the last 15 years. Finland, like most other countries, has adopted a merger control regime to identify and block anticompetitive mergers and acquisitions. However, only large deals must be notified to the authorities. Due to this, only a small fraction of transactions in the Finnish private healthcare market have been notified to the authority. The essay finds that the exempted acquisitions have resulted in higher prices in the acquired clinics. The increase in price in the acquired clinics is related to the target clinics adopting the pricing strategy of the acquirer. The results demonstrate that acquisitions exempted from merger control can have a large impact on prices and the functioning of markets.

    Contact Riku Buri

    Tel. +358 40 660 6727