Competition Policy: A Tool for Regulatory Reforms & Structural Change - Essay Sample

Introduction

Competition policy helps to ensure that competition is allowed in the economy and society. Competition policy is also the middle of regulatory reforms. Its principles and analysis give a comparison of the market for getting the quality of economic and social rules while motivates the application of the regulations that protect competition.

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It also stimulates structural change which involves enforcement policy which is required to protect private market abuses from reversing the advantage of the reform. In global competition, laws point to the problem of monotony power, typically in three settings.

That is the relationship and agreement among other independent firms which is further subdivided into two groups that are horizontal agreement and vertical which are at different stages in production and distribution agreement, Actions of a single firm which is termed as monopolization and Structural combinations of independent firms known as mergers, in this category firms work as a group to gain some of the attributes of the monopoly-like raising of prices, reducing the output and avoiding the entry of innovations. The main problem is maintaining effectiveness in the competition policy since the focus shift towards more complicated cases such as restraints imposed by the lower level.

This enforcement may be caused by weakness in provision for imposing sanctions. There are various ways in which competition policy and regulatory policy relates. Such relationships include in a situation whereby regulation contradicts competition policy, for example, where rule permits price coordination. Another way Is in a condition where the law can replace competition in areas like where monopoly has appeared unchangeable. Regulations may also set some rules that support competitive biddings. In this case, Coordination is necessary to ensure that these tools are handled well as required in the context of competition law requirements.

Summary Case of Event

Competition policy is the intermediary to the regulatory reforms because its principles and analysis give a layout of getting the quality of economic and social rule as well as the stimulation of structural changes. In some countries like France, various reforms have been achieved even though competition law is still experienced by conflicting purposes and a dual in a fundamental structure, which is seen as a source of difficulties. The introduction of monopoly in the traditional process is ongoing delicately(Fabrizi 98). The risk of cross-subsidy and distortion is experienced in traditional monopoly.

Regulators such as Conceal de la concurrence tries to maintain competition on a neutral level in a simple way that can be done even in the absence of real structural separations. In a country like Europe, development levels encourage changes while France's regulatory bodies identify the growing markets becoming continental-wide.

In countries like France, they have not identified the solution towards the complete structural separations in historical infrastructure monopolies and competitive enter prices so that they can eliminate the intensive and the capacity to distort competition through cross-subsidies.

France prefers the use of behavioral control by imposing the use of dominant position provision of competition legislation. For example, in wholesale and distribution conception, competition is experienced in terms of discrimination unfair competition in pricing, which might not be known by other countries. In these cases, the policy is clearly defined and applied effectively. Due to the high competition rate, some businesses have learned run within the incentive structure to build important marketing tactics from a small shop to wholesale ones. The structure of this competition policy reflects these complexities experienced. Principles of the law follow certain standards, and the method of implementing it is well explained.

There is a model that is built for independent decision-making agency(Fabrizi 99). The need for competitors and consumer affairs in the ministry of finance, economy, and industry is another responsibility for the authority to emulate competition policy, especially in monitoring duties.

The existence of the competition policy and regulation carries a problem of friction because this kind of structure has a lot of disadvantages like an independent decision-making body about sanctions, little discretion of organizing its caseload, which causes delays in final decision making.

Relevant Market Functioning and the Role of Major Players

The market is divided into two types, that is the primary market and the secondary market. In the primary, four key players are the cooperation, institutions, investment banks, and the public accounting firm (Bartels, Andreas 22). In institution, they invest their resources incorporations that needs to be expanded so that they can grow their businesses.

In cooperation, they issue debt or equity in institutions depending on their capital in investment in the primary market. In these processes, banks are involved in mating the institution and corporation on the danger profile and investment method(. Corporations in the capital market act as the operating business that needs resources to grow and continue operations.

This varies in various ranges, such as industry, size, and geographical location. Amazon is an example of the first cooperation business. An institution in the primary market also knows as buy-side, consists of fund managers, instructional investors, and retailer investors. An example of the instruction market is global management.

The Secondary markets involve the Bank investments, which are referred to as the sell side, are invited to act as intermediaries between cooperation and institutions. Their primary duty is to bridge the gap between institutions and investors. The public account firm does multiple roles in the primary market. Such purposes include financial reporting, auditing financial statements taxes, among other functions. The corporations usually hire them for the account and advisory services.

There is an initial issuance of either debt or equity in the secondary market for the exchange of capital. This gives both the seller and the trader a strong bond and a good relationship. This market allows players to enter and leave the securities whenever they want, making the market liquid (Bartels, Andreas 48).

Buyers and sellers are the ones who fund the managers, or investors who wish to buy securities or debts will be required to look for a seller. Investment banks in the secondary market expedite the sales and trading of the given liabilities and equities between buyers and sellers. They conduct proper research on every stock. Its both outside potential and a downside risk, which helps both buyers and sellers o make the final judgment.

Economic Theory

The modern economic theory understands that economic agents' play a very important role in decisions making that determines the main difference between commercial and natural science. The expectations and predictions are the main building blocks of the economics theories(Fabrizi NP).

The main aim of economic theory is to influence the expectations of the time and path. The rational expectations hypothesis gives the expectations of the equibulim on both sides of the relationship. Various models explain the economic theory in competition policy and regulations.

First, there is an economic theory of childbearing, this involves the decision that the family will make about the size and the timing of birth. People's lives are one significant element of constraints on the choices they have made mostly in prices and incomes. This theory suggests that both payers and pricing should be allowed for flexible pricing while purchasing drugs for the family.

The other model in economic theory which is the nutrition of economics. This states that the ratio for the society to be independent mostly in nonprivate sectors markets to produce and supply food(Fabrizi NP). Economists direct on a diet in some areas like obesity, which causes market failure, which could encourage government action. Economic theory also provides a reliable guide through which it seems to provide incomplete information on healthcare demand. Health economist predicts that the demand for healthcare originated as demand for health.

However, the researchers state that big range of social-demographic characteristics such as age, ethnicity, sex, and education are boldly associated with health. The economic theory believes that healthcare demand is well connected with supply. In the practice of empirical model, consumers demand are not related because of inadequate data; the economic theory also responds to significant supply feedback of increased demand whose benefits are received by their individuals and do not rise as expected. This theory implies that financial development affects savings behavior in a big way. Increasement in finances motivates consumers and housing renders to increase savings to get more resources at a higher level.

Facts of the Case and Judgments

The government is monitoring economic theory in three areas: the interest rates, tax rates, and the social program (North, Douglass 73). The interest rate, also known as the cost of borrowing money, plays a vital role in enabling economic growth. In this area, the economic theory prefers the central banks to increase interest rates and generate more income from the borrowers.

There is tremendous importance in controlling the magnitude of the economy because a lot of overinvestment from private and public sectors can lead to a decrease in money supply and a great fall. The tax rate is the primary source of government income that helps build the public sector, such as infrastructure, healthcare, and other areas.

The economic theory states that the government should charge a high tax rate so that it can participate in developing the economy. The method also argues that the government should lower its income tax rates to both individuals and businesses(North, Douglass 76). The government should even lower on social spending on social programs, while the social programs plan to give skills training to individuals so that there will be adequate labor in the market.

The economic theory helps individuals to make decisions and achieve results that are good with their objectives. The results the individual gets are related to the individual self-interests. The economic theory on the individual is related to the concept of rational actors, the sensible assumption self-confidence, and the invisible band. The economist uses this theory to understand certain behaviors of the entire society; these put all individuals in the same consideration and make them choose and get the best output for their interests. In this theory, individuals depend on calculations to make choices that support their interests (North, Douglass 79). Researchers explain that when individuals are under pressure, they fail to make the right decisions since stress affects the part of the brain, which is a vital organ in this case.

Opinions on the Outcome

In the past decades, there have been financial problems and a decrease in employment rates. Economic theory is seen as a science. Through the use of these theories, there has been technocratic optimism describing the structure of economic science Economics is a policy that attars and promises and cannot be compared to any o their sciences like chemistry and physic.

The economic theory requires practical; for example, consumer choices accept to understand the financial of the data hence giving the government chance to generate income. Therefore when wealth goes up, there is a decrease in what people purchases(Avramov et al. 558). These clearly expla...