MEASURING THE RATE OF RETURN FOR COMPETITION LAW

Paul A. Grout and Anna Zalewska

Journal of Competition Law and Economics, 2008, vol. 4, issue 1, 155-176

Abstract: This paper focuses on the application and interpretation of measures of rate of return for competition law. Amongst other results, we analyse how outsourcing and similar arrangements impact the rate of profitability and show that the measurement is more volatile the greater the rate of profit (suggesting that the measures are most problematic when they are most needed). We identify and interpret the outsourcing arrangements that provide the lowest rate of profit and show that these arrangements have a close relationship to net present value. Finally, we provide suggestions to make profitability measures more informative for competition law.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:4:y:2008:i:1:p:155-176.

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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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