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Content archived on 2024-06-18

New Developments in Competition Policy

Objective

"My goal is to shed light on the competition implications of two recent much-talked about developments in business, namely the surge of new financial derivatives and the high bonuses paid out to CEOs. First, there has been a rapid expansion of financial markets in the last decade and the therein used instruments, so-called financial derivatives. These products are generally not publicly exchanged on a market, which makes it hard to know how much they are used. But it is, for example, estimated that derivatives consist of between 20% and 40% of the total daily value traded on the London Stock Exchange. This same opaqueness of financial derivatives –apart from having likely been one of the causes of the current economic difficulties- has created a new array of tools for firms to change the rules of the game into anti-competitive, yet hard to detect ways. For example, a firm can buy a contract such that it benefits from a rival’s share price to decrease, which is a credible commitment to behave aggressively against that rival. Second, the use of large bonuses for managers has received a lot of criticisms in the press lately. But it has been largely neglected in economic research that these bonuses may also affect how managers, and the firms they lead, compete. It may occur, for example, that bonuses may motivate managers to collude with their competitors. It is perhaps time to more deeply explore how bonuses -and more in general the design of contracts in the firm- may affect managers’ decisions to infringe competition laws. In my project, I shall study the competitive effects of widely used financial derivatives and executive bonuses, and I will do this both from a theoretical and empirical perspective."

Fields of science (EuroSciVoc)

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

FP7-PEOPLE-2010-IEF
See other projects for this call

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

MC-IEF - Intra-European Fellowships (IEF)

Coordinator

UNIVERSITEIT VAN AMSTERDAM
EU contribution
€ 177 340,80
Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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