NEWS 
                                                                   January 9, 1997


ECONOMIC SPEAKER SERIES PRESENTS PROFESSOR MICHAEL RIORDAN
       
       Dr. Michael Riordan will be the next speaker in the Commission's Economic Speaker
Series.  He has been a Professor of Economics at Boston University since 1988, and Director
of the Industry Studies Program in the Department of Economics since the founding of the
program in 1990.

       He will speak on Friday, January 17, 1997, from 1:00 pm - 3:00 pm in the
Commission Meeting Room, Room 856, at 1919 M Street, NW, Washington, DC.  In his
presentation, Dr. Riordan will discuss his paper "Anticompetitive Vertical Integration by a
Dominant Firm."

       According to Dr. Riordan, the paper develops a model of backward vertical integration
by a dominant firm into an upstream competitive industry that causes both input and output
prices to rise.  The dominant firm's cost advantage may or may not offset the negative effect
of higher prices on social welfare.  Whether it does depends on a simple indicator derived
from the dominant firm's input and output market shares and degree of prior vertical
integration.  The paper concludes that a vertical merger has similarities to a horizontal merger,
suggesting that vertical merger policy for this industry structure should be similar to
horizontal merger policy.

       Professor Riordan has written numerous journal articles on the economics of
contracting, industrial organization, regulation and antitrust, with particular attention to
problems of incentives.  His current research interests concern the public procurement of
health care services, exclusive contracting and vertical integration, and predation.  His
research has been sponsored by the National Science Foundation, the National Institute of
Drug Abuse, and other organizations.

       This presentation is open to the public, reservations are not necessary.

       Additional Information contact: James Pettler (202) 418-2043.
       News Media contact: Meribeth McCarrick at (202) 418-0256.


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