Three Essays in Competition and Consumer Policy

The thesis is made up of three chapters: The …rst chapter estimates the e¤ects of antitrust investigations on the market value of the investigated …rms. This analysis o¤ers insights on the performance of competition policy and its enforcement. The interest is on investigations carried out by the Italian Competition Authority between 1991 and 2007. We …nd that the start of the investigation is associated with an average drop of 0.6% in the market value of investigated …rms and a later infringement decision implies an average drop of 1%. The event associated with the highest impact is the decision of the last Court of Appeal. When the last Court upholds the Authority’s infringement decision the market value of …rms drops between 3% and 6%. Interestingly, there is no e¤ect when the last Court annuls the Authority’s decision. The second and third chapters study the e¤ects, on retail fuel prices, of a price comparison policy (a typical consumer policy intervention) introduced in the Italian pay-toll highways refueling market. In particular, the second chapter performs an empirical analysis while the third chapter presents an agent based computational economic (ACE) model, which aims to rationalize the empirical evidence and to inform the policy design. Di¤erently from what was expected (by policy makers and consumers associations), the empirical analysis …nds that the price comparison policy is associated with a small, but statistically signi…cant, increase in the average price of fuel (0.55 euro cents per liter). Nevertheless, despite this average increase in fuel prices, the policy might help (active) consumers make informed choices and save around 1 euro cent per liter. The ACE model predicts that the introduction of price comparison has a limited e¤ect on market prices as price competition among retailers is only marginally fostered. In addition, the model suggests that consumers that make use of price comparison might save around 0.5 euro cents per liter. These results are consistent with the empirical …ndings in suggesting that the price comparison policy had a limited impact on fuel retail prices and the overall e¤ect on consumers is mixed.