Richard Schmalensee

Richard L. Schmalensee is John C. Head III Dean and Professor of Management and Economics at the MIT Sloan School of Management. He is co-editor of Management: Inventing and Delivering Its Future (MIT Press, 2003).

  • Invisible Engines

    Invisible Engines

    How Software Platforms Drive Innovation and Transform Industries

    David S. Evans, Andrei Hagiu, and Richard Schmalensee

    Harnessing the power of software platforms: what executives and entrepreneurs must know about how to use this technology to transform industries and how to develop the strategies that will create value and drive profits.

    Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution—a revolution that will change both new and old industries.

    The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits.

    Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

    • Hardcover $8.75 £7.95
    • Paperback $22.95 £17.99
  • Paying with Plastic, Second Edition

    Paying with Plastic, Second Edition

    The Digital Revolution in Buying and Borrowing

    David S. Evans and Richard Schmalensee

    The definitive account of the trillion-dollar payment card industry.

    The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.

    • Hardcover $62.00 £45.95
    • Paperback $33.95 £27.00
  • Management

    Management

    Inventing and Delivering Its Future

    Thomas A. Kochan and Richard Schmalensee

    The MIT Sloan School of Management perspective on future management challenges.

    The MIT Sloan School of Management, as conceived by the legendary General Motors chairman Alfred P. Sloan, was founded in 1952 to draw on the scientific and technical resources of MIT and approach the problems of management with the rigorous research practices for which MIT was famous. Fifty years later, the Sloan School gathered international leaders in business and management, MIT faculty, students, and alumni to address again the basic principles that should guide business and management. This book presents the papers prepared by student-faculty teams, speeches by business and world leaders, and summaries of the discussions from this special convocation; taken together, they offer a guide to the future of management based on the hallmarks of MIT and Sloan—creativity and innovation.

    The topics considered coalesced around three main themes. First, and paramount, is the necessity of building and maintaining trust by means of openness, transparency, and accountability; this was addressed in speeches by Kofi Annan and Carly Fiorina and exemplified by the case study presented of Nike's efforts to rebuild the trust of customers. The increasingly complex conditions of the modern global economy emerged as another recurring theme, as the participants considered the effect of the growing spectrum of stakeholders on issues of corporate governance. The third common theme was the inescapability of technological and scientific change, from the Internet as a marketing tool to the organizational impact of information technology.

    • Hardcover $9.75 £6.95
    • Paperback $30.00 £24.00
  • Paying with Plastic

    Paying with Plastic

    The Digital Revolution in Buying and Borrowing

    David S. Evans and Richard Schmalensee

    In Paying with Plastic, David Evans and Richard Schmalensee provide a nontechnical distillation of their years of research on the economic, technological, and institutional forces that have shaped the payment card industry.

    Since Diners Club issued its first charge cards in 1950, payment cards—credit, debit, and charge cards—have revolutionized how and whenwe pay for goods and services. In Paying with Plastic, David Evans and Richard Schmalensee provide a nontechnical distillation of their years of research on the economic, technological, and institutional forces that have shaped the payment card industry. They show how competition works in an industry that does not neatly fit any of the standard economic models. They describe how the payment card companies such as MasterCard and Visa have developed complex systems for coordinating transactions among their thousands of bank members and millions of cardholders and accepting merchants. Evans and Schmalensee also describe recent developments in the industry and consider its likely evolution.

    • Hardcover $29.95
    • Paperback $21.95 £15.95
  • The Dilemma of Toxic Substance Regulation

    How Overregulation Causes Underregulation

    John Mendeloff and Richard Schmalensee

    In this provocative study, John Mendeloff shows that federal programs which set standards for toxic substances have twin dilemmas.The new standards that they establish are usually too strict and costly to justify the benefits they confer. But, at the same time, the slow pace of standard-setting means that many serious hazards are never addressed at all. Mendeloff argues that more extensive, but less strict, rulemaking could make both industry and workers better off and that changes in legislation are required to break the current stalemate.

    Mendeloff looks at workplace risks regulated, and not regulated, by OSHA. He discusses the thorny issue of how much our society should value the prevention of occupational disease deaths. His innovative investigation of "underregulation" brings together diverse data to show that moderate reductions in current exposure levels would often be beneficial. Regulating Toxic Substances makes a major contribution to our understanding of how regulation works by demonstrating that the strictness with which standards are set is a major cause of the slow pace. Administrative rulemaking procedures offer opportunities for those concerned about the reasonableness of standards - judges and other public officials, as well as the affected industries - to try to block or delay them. An important implication is that less strict standards would not necessarily reduce overall protection and might increase it.

    In a major discussion of regulatory reform, Mendeloff analyzes such alternatives to standard-setting as information and liability strategies and such generic changes in regulatory procedures as regulatory budget and regulatory negotiation. Finding that neither provides a sufficient response to the overregulation-underregulation problem, he proposes a three-step legislative package that could be applied at OSHA and other standard-setting agencies.

    This book is seventeenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $50.00
  • Private Antitrust Litigation

    New Evidence, New Learning

    Richard Schmalensee

    Is private antitrust litigation out of control, encouraging frivolous suits and deterring companies from pursuing innovative manufacturing, organization, and distributional techniques? Or is it a fair and useful system, particularly during periods when government antitrust enforcement is lax and pro-business? The contributions in this book shed new light on the current debate over treble damage reform. Using a unique collection of data on more than 2,350 antitrust cases filed in five districts between 1973 and 1983 - a research effort instigated by the Georgetown private treble damage project - prominent scholars analyze the key issues involved in reform proposals. Steven Salop and Lawrence White present an analytic framework for studying private antitrust litigation, setting out the policy issues and providing an overview of the data collected by the project. Paul Teplitz discusses the nature of the data and their collection in greater detail. Kenneth Elzinga and William Wood compare the cost of litigation to the size of settlements and awards in an attempt to gauge the degree to which the system compensates victims of antitrust violations as opposed to the system's effectiveness as a deterrent. Jeffrey Perloff and Daniel Rubinfeld focus on the incentives for litigants to settle, and Stephen Calkins notes the reaction of the legal system to treble damages in the light of motions to dismiss and motions for summary judgment. Thomas Kauper and Edward Snyder look at those cases that followed on government cases (primarily price fixing), and George Benston takes up multi-party cases, considering the effects of class actions, joint and several liability, and various claim reduction reform proposals on deterrence and the incentives to settle. The book's final section presents three interesting and diverse policy commentaries by George Garvey, Ira Millstein, and Donald Turner.

    Private Antitrust Litigation is sixteenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $60.00
  • Targeting Economic Incentives for Environmental Protection

    Albert Nichols and Richard Schmalensee

    This book makes a major and original contribution to the "incentives vs. standards" debate by showing how different targets (the points at which incentives are applied) affect the ability of regulation to provide environmental protection at lowest possible cost.

    Economists have long argued that environmental regulation should rely less on command and control approaches that employ uniform standards, and more on economic incentives, such as emission charges and marketable emission permits. This book makes a major and original contribution to the "incentives vs. standards" debate by showing how different targets (the points at which incentives are applied) affect the ability of regulation to provide environmental protection at lowest possible cost. In particular, it argues that scholars and regulators both have paid insufficient attention to developing strategies that are sensitive to major variations across plants in the benefits of controlling emissions.The book develops a theory that shows how the choice of target interacts with the charge or standard in determining the net benefits of regulation. This conceptual framework is applied to a case study of proposed regulations for chemical plants that emit benzene, which is a suspected cause of leukemia. It reveals that a charge targeted on exposure would perform much better than an emission standard or the type of uniform emission charge usually advocated by economists.

    Albert L. Nichols is presently on leave from Harvard as Director of the Economic Analysis Division of the Office of Policy, Planning, and Evaluation, and Special Assistant to the Assistant Administrator for Policy, Planning, and Evaluation, U.S. Environmental Protection Agency, Washington, D.C. The book is eighth in the Regulation of Economic Activity Series, edited by Richard Schmalensee.

    • Hardcover $33.00
  • Markets for Power

    Markets for Power

    An Analysis of Electric Utility Deregulation

    Paul L. Joskow and Richard Schmalensee

    This timely study evaluates four generic proposals for allowing free market forces to replace government regulation in the electric power industry and concludes that none of the deregulation alternatives considered represents a panacea for the performance failures associated with things as they are now. It proposes a balanced program of regulatory reform and deregulation that promises to improve industry performance in the short run, resolve uncertainties about the costs and benefits of deregulation, and positions the industry for more extensive deregulation in the long run should interim experimentation with deregulation, structural, and regulatory reforms make it desirable. The book integrates modern microeconomic theory with a comprehensive analysis of the economic, technical, and institutional characteristics of modern electrical power systems. It emphasizes that casual analogies to successful deregulation efforts in other sectors of the economy are an inadequate and potentially misleading basis for public policy in the electric power industry, which has economic and technical characteristics that are quite different from those in other deregulated industries.

    • Hardcover $32.50
    • Paperback $34.00 £27.00

Contributor

  • Cost Proxy Models and Telecommunications Policy

    Cost Proxy Models and Telecommunications Policy

    A New Empirical Approach to Regulation

    Farid Gasmi, D. Mark Kennet, Jean-Jacques Laffont, and William W. Sharkey

    An empirical approach to understanding telecommunications regulation based on the use of a sophisticated engineering cost proxy model.

    The telecommunications industry defies easy characterization. The long-distance sector is highly competitive and the local exchange sector much less so, while digital transmission and switching have blurred the distinction between traditional voice communication and the transmission of video and data messages. Regulation of this industry has generally been considered necessary because it has aspects of a natural monopoly.

    This book takes an empirical approach to natural monopoly and the need for regulation of telecommunications. The centerpiece of the analysis is a sophisticated engineering cost proxy model, the local exchange cost optimization model (LECOM). The book, which is largely methodological, shows that a combination of LECOM, econometrics, and simulations can aid policy discussion of such contentious issues as incentive regulation, natural monopolies, estimating the cost of interconnection among networks, and the obligation of universal service. The book presents a theoretical framework to explain the incentives of firms and the power of regulation and then uses LECOM to test the theoretical implications. The work is unusual in that it applies the foundations of regulation theory to a model of an industry rather than applying econometric theory to historical cost data. The book includes a CD-ROM containing the data set the authors used to analyze their model.

    • Hardcover $10.75 £8.99
  • Calculating Risks?

    Calculating Risks?

    The Spatial and Political Dimensions of Hazardous Waste Policy

    James T. Hamilton and W. Kip Viscusi

    Hazardous wastes often head the public's list of environmental concerns. Exaggerated estimates of cancer epidemics arising from waste sites generate a sense of alarm, but little is known about the real extent of the health threats. In this book James T. Hamilton and W. Kip Viscusi present the first comprehensive analysis of the magnitude of hazardous waste risks and of the efficacy of the Environmental Protection Agency's Superfund program.

    By matching agency decision data to detailed census information using geographic information systems (GIS) technology, the authors show that most hazardous waste sites do not pose sufficient risk to merit the most stringent cleanup options. Those sites that do pose considerable risk to exposed populations often receive inadequate attention, because government decisions to target cleanups are based more on political factors than on actual risks. The authors propose policy reforms that could significantly reduce cleanup costs without sacrificing the protection of human health. Beyond its analysis of a particular risk policy, the book serves as a general model for comprehensive risk analysis.

    • Hardcover $10.75 £7.95
    • Paperback $26.00 £20.00
  • Regulatory Reform

    Regulatory Reform

    Economic Analysis and British Experience

    Mark Armstrong, Simon Cowan, and John Stuart Vickers

    Regulatory reform had its beginnings in the United States in the 1970s, and today it is taking place around the globe. One of the central questions for industrial policy is how to regulate firms with market power. Regulatory Reform tackles this important policy issue in two parts: it describes an analytical framework for studying the main issues in regulatory reform, and then applies the analysis to the British experience in four utility industries - telecommunications, gas, electricity, and water supply. Britain's utility industries, state-owned monopolies just ten years ago, offer a dramatic example of comprehensive reforms with parallels elsewhere: industries have been restructured, markets have been liberalized, and new regulatory methods and institutions have been created. The authors focus on common policy questions that arise in each industry while taking into account the considerable diversity between the industries and the different reform policies adopted. The analysis and experience in Britain's utility industries also provides a rich variety of issues concerning monopolistic and anticompetitive practices that are of interest for competition policy in general. Regulation of Economic Activity series

    • Hardcover $60.00 £44.95
    • Paperback $45.00 £35.00
  • Informational Approaches to Regulation

    Informational Approaches to Regulation

    Wesley A. Magat and W. Kip Viscusi

    Their set of original studies of household chemicals, energy audits, and food risk labeling establishes guidelines for the design and evaluation of these informational regulations.

    How does risk labeling information on hazardous household chemicals and pesticides influence consumer behavior? While many studies speculate on the effects of risk information, Magat and Viscusi draw on a series of extensive surveys to assess the likely response. Their set of original studies of household chemicals, energy audits, and food risk labeling establishes guidelines for the design and evaluation of these informational regulations. Their findings also include new estimates of the valuation of nonfatal health risks, the first estimates in the literature of the role of altruism, and an assessment of the influence of irrational responses to risk.

    Although economists suggest that giving consumers information about potentially hazardous goods is preferable to direct regulation of product content, implementation of information regulation raises a host of issues that need to be addressed. Magat and Viscusi document the cognitive limitations that consumers have in processing information and break new ground by showing how, given this behavior, the informational regulations should be designed.Case studies assess the degree to which different kinds of consumers notice, remember, and heed printed warnings in a range of wordings and formats. They then examine risk valuation, showing how much consumers are willing to pay for increased product safety under various conditions. A concluding chapter synthesizes the results and discusses their implications for regulatory policy.

    • Hardcover $67.00 £52.00
  • Privatization

    Privatization

    An Economic Analysis

    John Stuart Vickers and George Yarrow

    The process of selling assests and enterprises to the private sector raises questions about natural monopolies, the efficiency and equity of state-owned versus privately owned enterprises, and industrial policy. This comprehensive analysis of the British privatization program explores these questions both theoretically and empirically.

    • Hardcover $47.50
    • Paperback $40.00 £30.00
  • Deregulation and the Future of Intercity Passenger Travel

    Deregulation and the Future of Intercity Passenger Travel

    John R. Meyer and Clinton V. Oster, Jr.

    This book surveys the latest changes in the turbulent area of airline deregulation.

    This book surveys the latest changes in the turbulent area of airline deregulation. The authors' third collaboration on the subject, it deals with such current trends and topics as the proliferation of mergers and takeovers and the stategies and tactics involved in price wars and other marketing ventures. At the same time Deregulation and the Future of Intercity Passenger Travel is much more than an update on changes in the airline industry. It studies all the major systems of intercity passenger transportation - automobiles, buses, trains, airplanes - from the point of view of their interdependency. And it extends well beyond recent events to embrace the transportation history of much of this century, discussing the historical precedents and outcomes that have collectively given impetus to the trends in operation today, with special emphasis on the patterns of governmental subsidies and regulations. The authors also forecast probable developments in the next century, examining the impacts of various assumptions about future public policies, changes in technology, demographic patterns, and consumer preferences. The first part of the book focuses on the U.S. experience with airline deregulation, including changes in distribution channels and the travel agency business as well as the effects on airline employees and passengers. The second part takes up the economics of competition among the major modes in intercity travel.

    Deregulation and the Future of Intercity Passenger Travel is fifteenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $58.00 £39.95
    • Paperback $24.00 £18.99
  • Public Regulation

    New Perspectives on Institutions and Policies

    Elizabeth E. Bailey

    Public Regulation studies the formation of institutions and government policies that regulate industry, offering new data, new contexts, and new tools for analyzing the structure and performance of regulatory activity. It addresses both how these institutions and policies came into being and how well or poorly they work. The contributors examine them variously, from economic, political, social, and historical points of view. The eleven original essays propose and demonstrate a wide variety of new techniques for assessing regulatory performance—general equilibrium theory, laboratory methods, the integration of rational expectations and game theory methods with regulations, cost-functions techniques, and probabilistic risk analysis—to reveal new empirical data from a range of regulated industries—agriculture, natural gas, nuclear power, airlines, health and environment. Essays in the book's first part, "Design and Formation of Regulatory Regimes," deal with the shaping of institutions and policies and with the political evolution of regulatory regimes. The second part of the book, "Assessment of Regulatory Performance," covers theory and methods, performance and effects. Public Regulation is fourteenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $47.50
  • Perspectives on Safe and Sound Banking

    Perspectives on Safe and Sound Banking

    Past, Present, and Future

    George G. Kaufman, George J. Benston, Robert A. Eisenbeis, Paul M. Horvitz, and Edward J. Kane

    In this book five leading bank scholars explore the safety and soundness of the U.S. banking system in an economic environment where the likelihood of failures of individual banks has significantly increased.

    Banking is now, and always has been, a risky business. The key to success both in operating a bank and in supervising a banking system is appropriate risk management. Yet risk management has become increasingly difficult because of higher and more volatile interest rates, faster and cheaper transfer of funds and information, a movement toward deregulation, and subsidies for many institutions embedded in the flat-rate premium structure of the federal deposit insurance system. In this book five leading bank scholars explore the safety and soundness of the U.S. banking system in an economic environment where the likelihood of failures of individual banks has significantly increased.

    The book's ten chapters cover: the risks of the failure of individual banks and of the banking system; consequences of bank failure on other banks, financial markets, and economic activity; the role of government deposit insurance; alternative ways of resolving insolvencies; the role of lender of last resort; risk and organizational issues in the expansion of banking activities; market discipline as a means of limiting banking problems and failures; feasibility and desirability of permitting or requiring market-value reporting for financial institutions; risk rated premiums; the effectiveness of supervision and field and remote examinations; the effectiveness of centralization or decentralization of regulation, supervision, and examination in multiple federal and state agencies.

    Perspectives on Safe and Sound Banking is copublished with the American Bankers Association and is included in the Regulation of Economic Activity Series, edited by Richard Schmalensee.

    • Hardcover $58.00 £45.00
    • Paperback $36.00 £28.00
  • The Gathering Crisis in Federal Deposit Insurance

    Edward J. Kane

    This study warns bankers, regulators, politicians, and taxpayers that no matter how well the deposit-insurance system may have run in the past it is headed for an expensive bureaucratic breakdown.

    The system of federal deposit insurance adopted during the 1930s has become increasingly costly and unreliable. This timely study warns bankers, regulators, politicians, and taxpayers that no matter how well the deposit-insurance system may have run in the past it is headed for an expensive bureaucratic breakdown. It forcefully argues that unless market discipline can be reintroduced, this breakdown threatens to take depository institutions into de facto nationalization. Reversing these trends, it points out, requires redesigning the deposit insurance system to curtail the subsidizing of risk taking by deposit institutions, a practice that has resulted in widespread insolvency among financial institutions. The Gathering Crisis in Federal Deposit Insurance provides more than a warning. It shows that the current system is unfair and has transformed the federal government into the chief supplier of equity funds to depository institutions. And it observes that whenever the financial environment is changing rapidly, the existing system of deposit insurance subsidizes risk-taking in ways that impose a huge, but largely unrecognized burden on the general taxpayer and conservatively managed financial institutions. In one way or another, the taxpayer is going to be called upon to make good the financially staggering amount of the system's guarantees. The book provides a comprehensive discussion of FDIC and FSLIC policies and procedures, describes the variety of risks facing deposit institutions and their implications for the insurance system, explains the perverse risk-bearing incentives inherent in the current deposit insurance system, documents the extent of actual insolvency at insured institutions, and proposes a framework for reform.

    The Gathering Crisis in Federal Deposit Insurance is eleventh in the series, Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $22.50
  • Deregulating the Airlines

    Deregulating the Airlines

    Elizabeth E. Bailey, David R. Graham, and Daniel P. Kaplan

    Deregulating the Airlines narrates and analyzes the decisions taken by the Civil Aeronautics Board during the transition to deregulation and the reasoning behind the Airline Deregulation Act of 1978.

    The airline industry has been buffeted by the forces of deregulation since the mid-1970s. Many new firms have entered, some with different price and operating philosophies and some of these have thrived. Other airlines have gone bankrupt. Overall the real cost of air travel has declined considerably; however, the effects have varied dramatically from market to market. Exactly how was this massive experiment envisioned and planned? How has it worked? And how will it work in the long run? Deregulating the Airlines narrates and analyzes the decisions taken by the Civil Aeronautics Board during the transition to deregulation and the reasoning behind the Airline Deregulation Act of 1978. It provides many comparisons of the industry before and after deregulation and uses those data to test the various hypotheses that scholars and politicians have advanced about how markets would behave if regulation were removed. Its findings provide information on both the demand and the cost side that will be important in molding the long-run equilibrium of the industry, and it discusses how quickly the industry is moving toward that equilibrium. For policymakers and students of regulation in particular, this study provides a unique case for contrasting the operation of an industry under close regulatory control and its operation free of such controls. It is able to make use of an unusually large volume of data on the costs, operations, and prices of individual firms to show how markets work and how regulation works. The book's in-depth analysis of the impact of policy changes in the airline industry is drawn in part from the authors' active involvement in implementing the new policies.

    Deregulating the Airlines is tenth in the series, Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $42.00 £34.95
    • Paperback $18.00 £13.99
  • Deregulation and the New Airline Entrepreneurs

    John R. Meyer and Clinton V. Oster, Jr.

    Deregulation in the airline industry has spurred a major growth in entrepreneurs competing with established carriers. This book takes a close look at the phenomenon in two areas - commuter airlines using small propeller-driven aircraft to offer scheduled short-haul service in low density markets, and jet-equipped carriers like the now familiar Southwest Airlines, New York Air, and People's Express, offering simple, no-frills service and low fares in short to medium hauls. Airline Deregulation focuses in particular on how these two relatively new segments of the industry will eventually be structured, and their impact on the rest of the industry. It points out that already, in their present structure, these carriers have played significant roles in rationalizing service to small communities, broadening the range of fare and service offerings, improving productivity, and lowering cost structures.

    Chapters cover opportunities in a deregulated industry, entrepreneurial opportunities before deregulation, the demand for short-haul air service and its cost structure, commuter airline safety, financial strategies, competitive strategies of new entrant jets, and of commuters, airport congestion and new entrant access, small community service and the role of Federal subsidy, and airline industry structure and public policy.

    Deregulation and the New Airline Entrepreneurs is the ninth volume in the Regulation of Economic Activities Series, edited by Richard Schmalensee.

    • Hardcover $32.50
  • Folded, Spindled, and Mutilated

    Economic Analysis and U.S.v. IBM

    Franklin M. Fisher, Joen E. Greenwood, and John J. McGowan

    Foreword by Carl Keysen One of the most important antitrust cases in 50 years, U.S. vs. IBM, was filed in 1969 and dropped by the Justice Department in 1982. This economic analysis by participants for the defense argues that the IBM case failed not because the antitrust laws are obsolete, but because the government and its economists made major analytical errors throughout the case. The topics they discuss in this book, which grew from their studies and the trial testimony, range over the standard and important ones in an antitrust case charging single-firm monopolizing: market definition, market share, technical change, entry barriers, behavior (predation), and profitability.

    Folded, Spindled, and Mutilated is a Charles River Associates Study and seventh in The MIT Press series on the Regulation of Economic Activity, edited by Richard Schmalensee.

    • Hardcover $30.00
    • Paperback $16.50
  • U.S. Oil Pipeline Markets

    Structure, Pricing, and Public Policy

    John A. Hansen

    This study uncovers these segments for the first time, taking up such basic subjects as the structure of pipeline markets, pricing strategies and the level of competition in the industry, and the effects of public policy alternatives - ranging from uniform, industry-wide regulation to complete deregulation - on market performance.

    The silent flow of millions of gallons of oil and petroleum products every day just beneath the surface of the United States is a vital link in the energy and production chain that makes modern industrial society possible. The interstate oil pipelines traverse more than four times the mileage of the interstate highway system, and represent a capital investment of over 21 billion dollars. And yet important segments of the industry have been as hidden from view as the pipelines themselves. This study uncovers these segments for the first time, taking up such basic subjects as the structure of pipeline markets, pricing strategies and the level of competition in the industry, and the effects of public policy alternatives - ranging from uniform, industry-wide regulation to complete deregulation - on market performance. In eight chapters, the book covers the structure of the industry and the physical properties that determine the economic constraints of oil pipelining; the historical development of the industry and its regulation; the various types of geographic and product markets and the level of competition within them; patterns of price changes based on available rate data; the rate of return on invested capital as a function of the manner in which regulations are applied; recent profit levels in the industry as an index of monopoly power; and the impacts of various policy options (partial deregulation, complete deregulation, disintegration, and other policies are explicitly evaluated). Many of the book's findings apply to public utility regulation in general and can be used by regulators of any industry who are concerned with promoting economic efficiency while simultaneously protecting the public interest.

    • Hardcover $32.50
  • Incentives for Environmental Protection

    Thomas C. Schelling

    This book explores the extent to which pricing incentives such as charges on emissions; in contrast to regulatory standards, can be shaped into a practical policy that is technically effective, politically enactable, administratively enforceable, and equitable. It also compares he advantages and disadvantages of this approach to those that characterize the policy of compliance to regulatory standards. And it identifies the criteria on which either pricing mechanisms or regulatory standards should be based. Three case studies comprise the heart of the book. One investigates carcinogenic chemical emissions, another audits the tradeoffs in controlling aircraft noise near major airports, and the third treats the protection of air quality from pollution by primarily stationary sources. The case studies are introduced by a chapter that gives numerous examples of possible pricing approaches and identifies common lessons that the three diverse studies reinforce.: The studies are followed by a chapter which is based on interviews with Congressional staff, environmentalists, and industrial lobbyists and other interest groups in Washington, revealing their assessments of pricing mechanisms in environmental protection.

    The book is fifth in the series, Regulation of Economic Activity.

    • Hardcover $45.00
  • Studies In Public Regulation

    Studies In Public Regulation

    Gary Fromm

    "This is a stimulating collection.... Each [paper] makes an original contribution to some aspect of the economics of regulation. "

    Contributors Paul L. Joskow, Roger G. Noll, Robert D. Willig, Elizabeth E. Bailey, Patricia Munch, Dennis Smallwood, Richard C. Levin, Robert A. Leone, John E. Jackson, Melvyn A. Fuss, Leonard Waverman, Kenneth C. Baseman, and Sam Peltzman

    A Regulation of Economic Activity series paperback.

    • Hardcover $60.00 £44.95
    • Paperback $35.00 £27.00
  • The SEC and the Public Interest

    Susan M. Phillips and J. Richard Zecher

    "Throughout most of its 44-year history, the Securities and Exchange Commission enjoyed a reputation as one of the government's most effective and admired agencies; widely regarded by the public as dynamic, vigilant, productive, and unbeholden to either politicians or the securities industry," according to an article in Business Week. "Today, however, a lot fewer people view the agency that way, and increasingly it is under attack for moving farther and farther away from its traditional watchdog role and becoming, instead, an activist in forcing change—not only in the securities industry but in the corporate boardrooms as well."However, the role of the SEC in the changes that are occurring in the securities industry is viewed very differently by the authors of this significant study. The authors conclude that the role of the SEC is best viewed as that of a broker balancing out the strongly competing groups in the securities industry.The book addresses the premises on which the SEC was founded to determine the extent to which they still apply in today's trading and disclosure environment. Following their review of the historical development of the SEC and an examination of some recent and pending issues facing the commission, the authors consider three particular areas in depth: the deregulation of fixed commission rates, the development of a national market system, and the corporate disclosure system. All three are fundamental to the basic mandate of the commission but nevertheless illustrate the growing power and activity of the agency in areas that previously had been left entirely to the private sector for innovative development. Looking ahead, the book identifies some of the specific issues arising from these three areas of concern that the SEC is expected to face in coming years. As its authors state, "We have made a strong case in this book that the SEC administers should be judged in terms of their costs and benefits and that many of the SEC's regulations are antiquated in today's trading environment."