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Lura Forcum
Kelley School of Business

George Vlahakis
University Communications

Last modified: Thursday, January 15, 2009

Economist returns to Kelley after more than a year in Washington at the Federal Trade Commission

Jan. 15, 2009

BLOOMINGTON, Ind. -- Professor Michael Baye has returned to Indiana University's Kelley School of Business after spending the past year and a half as director of the Bureau of Economics at the Federal Trade Commission (FTC).

Baye, the Bert Elwert professor of business economics since 1997, served as the agency's chief economist, supervising economic analysis at the FTC and advising on economic policy matters. Baye promoted the effective interaction of economists in the Bureau of Economics with attorneys in the bureaus of Competition and Consumer Protection.

He was also the public face of the bureau, traveling extensively to communicate the FTC's work through speeches, interviews, writings and personal outreach to economists, lawyers, the general public, foreign antitrust authorities, universities and other government agencies.

The FTC prevents anti-competitive behavior by firms and protects consumers by preventing fraudulent, deceptive or unfair business practices. The FTC's Bureau of Economics is part of a system of checks and balances at the commission that also includes the bureaus of Competition and Consumer Protection. All three bureaus make recommendations to the FTC, which is the ultimate decision maker.

Baye said the fast-paced Washington environment proved a sharp contrast to academia.

"The sheer number of issues that came up at the FTC surprised me. I acted on hundreds of items that that came up every day," Baye said. "As an academic, I might spend two years thinking about a problem and working on it."

Baye's academic research uses tools from game theory and industrial organization to examine the impact of various business strategies on consumer welfare and firm profits. His studies of pricing strategies in online markets where consumers search for price information have been published in leading economics and marketing journals such as the American Economic Review, Econometrica, Management Science and The Journal of Political Economy.

This expertise was especially valuable as the FTC examined the Google-DoubleClick merger and other anti-trust matters involving the online marketplace. Baye also helped the FTC to assess the policy ramifications of various regulations directed at online behavioral advertising.

"Professor Baye is one of those members of our faculty team who can do it all. He's a gifted scholar and classroom instructor and a great citizen of the school. All of us are proud of his public service while at the Federal Trade Commission," said Kelley Dean Dan Smith. "His Washington experience, especially the rigors of interacting with people of various backgrounds in a changing regulatory environment, will undoubtedly provide new perspectives for his research and will translate to the Kelley classroom in the form of a wide array of rich examples."