Page 110 - Undergraduate Research Opportunities Program Proceedings 2017-18

School of Business and Management
Department of Economics

Department of Economics

Anti-competitive behavior among firms and policy implications

Supervisor: FONG Yuk Fai / ECON
Student: FU Xiao / ECOF Course: UROP1100, Fall

This report focuses on comparisons between the antitrust law enforcement on resale price maintenance (RPM) in U.S
and China. The report starts with the introduction and comparison of the 3 main legal doctrines applied in law
enforcement: Per se illegal rule, rule of reason and forbidden with exemption. Though typical case analysis, it further
briefly analyzes the different factors the Courts took into account to evaluate economic effects of RPM in U.S. and China
when they adopted different legal doctrines. By conducting general comparisons between the two countries through
real case analysis, the report is aiming at providing useful information for transnational corporations who want to take
RPM practice in U.S. and China. This report also gives a reference to future research on economic theories behind the
law enforcement on RPM.

Supervisor: FONG Yuk Fai / ECON
Student: HUANG Silin / MAEC Course: UROP1100, Fall

Built on the idea that high-end consumers tend to search less for a lower price, the passive searcher model (Professor
Fong’s Note) shows that in vertically differentiated markets, offering only the high-quality product with an absence of
the low-quality product can facilitate price collusion. With the as-sumption that people with higher income are more
likely to be passive searchers and purchase higher-quality goods, the model could be applied to explain price collusion
among high-quality product com-panies. The objective of this project is twofold. First, it aims to investigate the
plausibility of the pas-sive searcher model in explaining firms’ practices. The practices discussed include the Hong Kong
auto-fuel market and the issue of tuition price-fixing in private colleges. Second, the paper provides in-depth analysis of
luxury goods markets to evaluate the model by comparing it with alternative ex-planations. Welfare analysis of the
luxury goods is also presented to study the necessity of anticom-petitive regulation in luxury markets.

Supervisor: FONG Yuk Fai / ECON
Student: LIU Shuangrui / SBM Course: UROP1100, Fall

Ministry of Commerce (MOFCOM) is the antitrust authority responsible for merger control in China. This article aims to
evaluate how MOFCOM’s merger analysis on horizontal merger has been convergent toward that in Europe and America.
The article focuses on the role of antitrust economics in MOFCOM’s decisions and considers the influence of China’s
industry policy on the trend of convergence. The study is mainly based on MOFCOM’s published cases, including its most
recent merger control decision. For an individual case, comparisons with western authorities’ decisions and MOFCOM’s
decisions on similar cases are drawn to analyze the evolvement of MOFCOM’s merger control. The article finds out that
China’s horizontal merger control has used increasingly more sophisticated economic reasonings to support its decisions
since China adopted a formal merger control framework in 2008. More consistencies of MOFCOM’s merger control with
other jurisdictions and among its own decisions should be expected in the future. However, concerns due to China’s
industry policies may still be a potential cause of inconsistencies.

Supervisor: FONG Yuk Fai / ECON
Student: LO Wai Yau / MAEC Course: UROP1100, Fall

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