New ZEW Research Group "Competition and Regulation": Strengthening Competition, Optimising Regulatory Interventions

Founded in January 2012, a new research group at ZEW is devoted to studying questions related to competition and regulation. In this interview, the head of the research group, Professor Kai Hüschelrath, explains the group’s specific goals and mission.

Professor Dr. Kai Hüschelrath is head of the new ZEW research group "Competition and Regulation", and coordinator of Leibniz-ScienceCampus "Mannheim Centre for Competition and Innovation" (MaCCI). Since 2006 he has been conducting research at ZEW on topics related to the economics of competition. Until the end of 2011, he was a Senior Researcher in the Department of "Industrial Economics and International Management". He holds an Assistant Professorship in Industrial Economics and Competitive Strategy at WHU Otto Beisheim School of Management.

Previously, economic issues related to competition were part of the research mission of the ZEW department "Industrial Economics and International Management". What was the reason for creating a separate research group for this area of study?

In past years, the areas of competition and regulation have increased in importance, not only with respect to research, but also in economic policy-making and business practice. Examples include recent initiatives for strengthening the private enforcement of competition law or the economic implications of the recent change in Germany’s energy policy. By establishing the new research group, ZEW is acknowledging the importance of these developments. Although there is no doubt that the work of the new group remains linked to industrial economics, we will put a stronger focus on interdisciplinary perspectives, especially on legal aspects within the scope of a “law and economics” approach.

What specific subjects and issues will the new research group focus on?

The new research group is focusing its work on two subject areas. As part of the research focus "Competitive Strategy and Competition Policy", the group will focus on the economic effects of firm behaviour by applying both theoretical and empirical methods; conclusions for the design of competition law and policy are being derived. Specific focal points lie on welfare assessments of mergers and inter-firm coordination in the areas of both production and sales.

The group’s second research focus is on recent developments in competition and regulation in selected network industries. With respect to energy markets, recent research topics include the design of effective and efficient regulatory schemes, effects of ownership structure and strategic behaviour of energy suppliers on final consumers as well as an effective market design at the wholesale level in power and gas markets. With respect to transport markets, research activities concentrate on studies on the evolution of competition in rail and air traffic markets.

How do you envision the work of the research group in ten years’ time?

The issues to be addressed by the new research group will continue to become more important in the future. For this reason, I am optimistic that in ten years, the group will continue to make a significant contribution to ZEW’s overall success. The relevance of competition and regulation for the work of all other research units at ZEW facilitates broad opportunities for cooperation, and it will be important to put this potential in practice in the years to come.