"The Apple iPod iTunes Anti-Trust Litigation"

Filing 740

Administrative Motion to File Under Seal filed by Apple Inc.. (Attachments: # 1 Declaration Kiernan Declaration ISO Administrative Motion to Seal, # 2 Proposed Order Granting Motion to Seal, # 3 Exhibit Rdacted Version of Defendant's Notice of Motion and Motion for Summary Judgment and to Exclude Expert Testimony of Roger G. Noll, # 4 Exhibit SEALED Version of Motion for Summary Judgment and to Exclude Testimony, # 5 Exhibit REDACTED - Separate Statement ISO MSJ, # 6 Exhibit SEALED - Separate Statement ISO MSJ, # 7 Exhibit REDACTED - Exhibit 3 to Amiri Decl., # 8 Exhibit SEALED - Exhibit 3 to Amiri Dec, # 9 Exhibit REDACTED - Exhibit 4 to Amiri Dec, # 10 Exhibit SEALED - Exhibit 4 to Amiri Dec, # 11 Exhibit REDACTED - Exhibit 5 to Amiri Dec, # 12 Exhibit SEALED - Exhibit 5 to Amiri Dec, # 13 Exhibit REDACTED - Exhibit 6 to 8 to Amiri Dec, # 14 Exhibit SEALED - Exhibits 6 to 8 to Amiri Dec, # 15 Exhibit REDACTED - Exh 9 to Amiri Dec, # 16 Exhibit SEALED - Exh 9 to Amiri Dec, # 17 Exhibit REDACTED - Exh 10 to Amiri Dec, # 18 Exhibit SEALED - Exh 10 to Amiri Dec, # 19 Exhibit REDACTED - Exh 11 to Amiri Dec, # 20 Exhibit SEALED - Exh 11 to Amiri Dec, # 21 Exhibit SEALED - Exh 13 to Amiri Dec, # 22 Exhibit REDACTED - Exh 14 to Amiri Dec, # 23 Exhibit SEALED - Exh 14 to Amiri Dec, # 24 Exhibit SEALED - Exh 15 to Amiri Dec, # 25 Exhibit SEALED - Exh 16 to Amiri Dec, # 26 Exhibit SEALED - Exh 17 to Amiri Dec, # 27 Exhibit SEALED - Exh 18 to Amiri Dec, # 28 Exhibit SEALED - Exh 19 to Amiri Dec)(Kiernan, David) (Filed on 12/21/2013)

Exhibit 14
[PUBLIC VERSION - REDACTED]

Do not delete this textbox

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION

__________________________________________
)
)
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THE APPLE IPOD ITUNES
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ANTITRUST LITIGATION
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)
)
__________________________________________)

Case No. C 05 00037 JW (HRL)
Case No. C 06 04457 JW (HRL)

SUPPLEMENTAL REPORT OF KEVIN M. MURPHY & ROBERT H. TOPEL
December 20, 2013

HIGHLY CONFIDENTIAL

TABLE OF CONTENTS
I.

PROFESSOR NOLL’S NEW ANALYSES DO NOT SOLVE THE
FUNDAMENTAL PROBLEMS INHERENT IN HIS REGRESSIONS ................ - 2 A. Professor Noll Does Not Correct for Correlation of Residuals within Groups or
Clusters in His New Regression ..................................................................................... - 4 B. In His New Regressions, Professor Noll Used the Wrong But-for World ..................... - 8 C. Although Professor Noll Changed the Specification of his Model, he Failed to
Include a Number of Characteristics in his New Regressions that are Important in
Explaining the Price of iPods ........................................................................................ - 10 1. The Omitted iPod Characteristics are Important in Explaining the Variance in
iPod Prices .............................................................................................................. - 10 2. Adding our Characteristics to Professor Noll’s Regressions does not Result in
“Extreme Multicollinearity” ................................................................................... - 12 3. Professor Noll’s New Regressions Suffer from Omitted Variable Bias ................. - 13 -

II.

PROFESSOR NOLL’S REBUTTAL REPORT INTRODUCES A NEW
THEORY OF IMMEDIATE IMPACT .................................................................... - 13 -

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LIST OF APPENDICES

APPENDIX A:

Curriculum Vitae (Kevin M. Murphy)

APPENDIX B:

Curriculum Vitae (Robert H. Topel)

APPENDIX C:

List of Materials Relied Upon

APPENDIX D:

Revised regression results

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1.

Our names are Kevin M. Murphy and Robert H. Topel. Each of us has previously

submitted a report in this matter in response to the Declaration of Roger G. Noll on Liability and
Damages, April 3, 2013 (hereinafter “Noll merits report”).1 We have now been asked by counsel
for Apple Inc. (“Apple”) to review the Rebuttal Declaration of Roger G. Noll on Liability and
Damages, November 25, 2013 (hereinafter “Noll rebuttal declaration”) and to respond to the new
theories, opinions, analyses, models, and exhibits contained therein. Our qualifications to serve
as economic experts are detailed in our previous reports and our curricula vitae. The matters in
which we have submitted expert reports and/or been deposed since the time at which we filed our
original reports are listed in our curricula vitae, which are attached to this report as Appendices
A and B, respectively. Our curricula vitae also contain current lists of our publications.
2.

In Professor Noll’s rebuttal declaration, among other things, he offers new

opinions, analyses, regressions and damages estimates, and exhibits that were not in his merits
report. We’ve been asked by Apple to address this new material. In this report, we confine our
opinions to this new material. At times it is necessary to summarize some of our earlier work in
order to provide context. Where Professor Noll restates opinions with which either of us
disagrees or where he merely defends the opinions in his merits report, we do not restate our
opinions here or otherwise respond to his defenses. The fact that we do not respond to every
point in Professor Noll’s rebuttal declaration should not be read as an indication that we agree
with any part of his opinions. We reserve the right to respond, and anticipate responding, to each
point that he has raised in his rebuttal declaration.
3.

This report sets forth our opinions and describes the bases for those opinions as

well as the data and analyses that underlie them. In preparing this report, we have reviewed
Professor Noll’s rebuttal declaration, together with his exhibits and appendices and the materials
cited therein. We have also reviewed the documents and publications listed in the footnotes to
this report. In performing our additional analyses and preparing the materials and exhibits
contained in this report, we have been assisted by our colleagues at Charles River Associates,
1

See Expert Report of Kevin M. Murphy, August 19, 2013 (hereinafter “Murphy report”) and Expert Report of
Robert H. Topel, August 19, 2013 (hereinafter “Topel report”); See Also Supplemental exhibits for Kevin M.
Murphy (November 11, 2013); Supplemental exhibits for Robert H. Topel (November 8, 2013); Expert Report of
Roger Noll, April 3, 2013; Noll Corrected Declaration, May 31, 2013.

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International. The list of additional materials we have considered is attached to this report as
Appendix C.

I.

PROFESSOR NOLL’S NEW ANALYSES DO NOT SOLVE THE
FUNDAMENTAL PROBLEMS INHERENT IN HIS REGRESSIONS
4.

In his rebuttal report, Professor Noll presents new regressions that attempt to

estimate an “overcharge” on the price of iPods. In response to our criticisms, he now uses
quantity weights rather than frequency weights to account for some of the correlation among the
error terms, changes the measure of time from a logarithmic to a scalar variable, changes the date
on which the iTS adopted DRM-free format, and adds a variable to indicate the date on which
Harmony was re-launched in April 2005. He has also changed the way in which he treats his
indicator variables for iTunes 4.7 and 7.0. Previously he turned on (set to 1) the iTunes 7.0
indicator and turned off (set to zero) the iTunes 4.7 indicator for all iPods as of September 2006,
when iTunes 7.0 was released. Now he turns on the iTunes 7.0 indicator and turns off the iTunes
4.7 indicator for only those iPods that included the
5.

As discussed more fully below, Professor Noll’s new regressions do not address

fundamental errors that rendered his first regression unreliable.
a) First, although he now uses quantity weights, the error terms in his new regressions
remain highly correlated within clusters or groups. One must correct for this
correlation in calculating the precision of estimates, but Professor Noll simply ignores
the problem. Correcting for this correlation using standard and accepted econometric
methods, we show that his estimates of impact and damages are not statistically
significant, i.e, they are statistically indistinguishable from zero.
b) Second, by turning off iTunes 4.7 he assumes the wrong but-for world.
c) Third, he fails to include important characteristics that explain price in his
regression.2

2

The effect of omissions such as these is generally called “omitted variable bias.” See A Guide to Econometrics
(Fifth Edition) by Peter Kennedy, Chapter 6.2 (1) (a-c), at p 107-108, MIT Press, 2003.

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6.

Once these flaws are corrected, Professor Noll’s new statistical analysis provides

no evidence of impact or damage. Although none of the estimated effects of 7.0 are statistically
significant once these corrections have been made, we have nevertheless used the coefficients to
re-estimate “damages” in order to show how sensitive his damages estimates are to these
changes.3 The results of this exercise are shown in Exhibits JT-1a and JT-1b. Once corrected,
even Professor Noll’s otherwise flawed model shows that there are no damages.
7.

As mentioned above, Professor Noll changed his treatment of the iTunes 4.7 and

iTunes 7.0 variables. As discussed more fully below, his treatment is at odds with plaintiffs’
theory and his earlier deposition testimony.4 To demonstrate the sensitivity of Professor Noll’s
model, we adjust his new model using his original treatment of 4.7 and 7.0, i.e., we turn on the
indicator variable for iTunes 7.0 and turn off the indicator variable for iTunes 4.7 for all models
on September 9, 2006. (See Exhibits JT-2a and JT-2b.)

3

As with his previous analysis, the damages calculations in Professor Noll’s rebuttal report were based on an
incorrect but-for price. In particular, he applies the alleged overcharge that he estimates to the actual price in the
marketplace, which would include the alleged overcharge, if any. Professor Noll recognized this error in his
deposition. See Noll Deposition, December 18, 2013, at pp.17:20-18:3. We have corrected this in our analysis and
will continue to use the corrected but-for price in our calculations without further comment.
4
See, e.g., Professor Noll’s deposition testimony of May 16, 2013 in which he said: “. . . the effect of 7.0 on price is
not necessarily limited to just the products that were sold that had 7.0 in them.” See May 16, 2013 deposition at pp
46:2 to 46:4. And, talking about the appropriate treatment of the iTunes 7.0 indicator variable: “If you did it only
for the one that had 7.0 on them, it would be because you thought that the effect was limited to just the products that
had 7.0 loaded. If you, instead, did it for all products, it was because you thought that the most important effect was
knocking Harmony out of the market. And I – I think that the latter is actually correct.” (ibid at pp. 48:24-49:6)
And a little later: “So I think that’s the right way to do it.”(ibid at pp. 49:14).
5
By proper but-for world, we mean a world in which the iTunes 4.7 variable is not turned off at the time of iTunes
7.0.

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A. Professor Noll Does Not Correct for Correlation of Residuals within Groups or
Clusters in His New Regression
8.

As Professor Noll recognizes, a fundamental assumption in regression analyses is

that the error terms are independent, not correlated.6 As we showed, this assumption was
violated in his original regressions.7 There were two underlying reasons for this. First, because
Professor Noll used frequency weighting in his analysis, he repeatedly created thousands of
identical observations when there was really only one. Second, even after removing that source
of correlation, the error terms on price observations for a given iPod at a given time (a “cluster”
of transactions) remain correlated because they are affected by many of the same economic
forces.8 This high correlation can be observed directly in the data. As mentioned above, he
fixed his first error by changing from frequency weighting to quantity weighting. He has done
nothing, however, to correct for the remaining high correlation of error terms within clusters in
his new regression. His insistence that clustering is not an issue in his new regression is, as a
matter of econometrics and statistics, simply wrong.
9.

Once the correlation of error terms within clusters is corrected in his new

regression, Professor Noll’s results are not statistically significant. That is, they cannot be
distinguished from zero by accepted scientific standards and so they provide no reliable evidence
of impact. Exhibits JT-1a and JT-1b (and also Appendices D2a and D2b) show the results of
clustering by family and quarter, i.e., of taking the correlation in the error terms into account for
Professor Noll’s reseller regression and direct sales regression, respectively. Column 1
reproduces the results of Professor Noll’s preferred specification as presented in Noll Exhibits
3A and 3B. Column 2 reproduces the results in Column 1, but correcting for correlation within
clusters. As Column 2 shows, the standard error of the coefficient on the iTunes_7 variable
increases dramatically from 0.0006 to 0.0407, and the corresponding t-statistic has decreased just

6

See Noll rebuttal declaration 36; Noll Deposition, December 18, 2013, at pp.23:18-23; See also Murphy report at
¶¶95-96 andTopel report ¶¶74-75. If the error terms are not independent, the regression coefficients will appear to be
much more statistically significant than they actually are.
7
See Exhibits 15a and 15b, and ¶¶95-96 from the Murphy report and Exhibits 11 and ¶¶74-75 from the Topel report.
8

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as dramatically (from 37.599 to 0.577).9 The other standard errors have increased just as
dramatically, reflecting the fact that Professor Noll has vastly overstated the precision of his
(otherwise flawed) regressions.10 This is clear evidence of the need to cluster. As stated in the
American Bar Association’s reference volume Proving Antitrust Damages (2010), standard
methods of adjusting for clustering “produce consistent estimates of the standard errors even
when there is no correlation among the error terms. In other words, they work well in both
situations.” If Professor Noll’s assertions had been correct, the standard errors would not
increase the way they do, but would, instead remain approximately the same.11 The fact that
clustering dramatically changes the results of Professor Noll’s regressions is itself concrete proof
that he is wrong.
10.

Professor Noll admitted that there are standard statistical tests to determine

whether the independence assumption is valid -- i.e., whether the errors are independent.12
However, he conducted none of those tests, relying instead on blind faith that “this is not a
clustering problem.”13 In our original reports, we presented evidence that the errors Professor
Noll’s original regressions were correlated within groups or clusters.14 (See Exhibits 15a and
15b in the Murphy report and Exhibits 13a and 13b in the Topel report.) Here we repeat that

9

These results are for the reseller regression. In the direct sales regression the standard error increased from 0.0002
to 0.0468, and the t-statistic decreased from 448.7 to 1.5.
10
The standard errors in Professor Noll’s new regressions are substantially larger than the standard errors in his old
regressions, but they are still small. They are so small, in fact, that Professor Noll’s claims of precision and
statistical significance cannot possible be true. See, e.g., discussion in Topel report at ¶65.
11
See ABA SECTION OF ANTITRUST LAW, PROVING ANTITRUST DAMAGES: LEGAL AND ECONOMIC
ISSUES (2D Ed. 2010), at p 46-47.
12
Indeed, in his rebuttal report he criticizes us for purportedly not examining whether the mean residual errors
within clusters are statistically significantly different from zero. See Noll rebuttal declaration, at p 33 and 34.
13
See Noll Deposition, December 18, 2013, at pp 186:6-187:22.
14
Professor Noll suggests that clustering by product family and time is unwarranted, but his reasoning is flawed.
Including fixed effect for cluster-specific groups does not obviate the need to cluster. See A Practitioner's Guide to
Cluster-Robust Inference, by Colin Cameron and Doublas L. Miller (Department of Economics, University of
California - Davis), October 15, 2013, at p. 16. Second, with respect to clustering by quarter, Professor Noll has not
provided any evidence that there are no unobserved common factors specific to different quarters, even adjacent
ones. Moreover, to the extent that Professor Noll is suggesting that quarters may be “too short” for there to be such
unobserved common factors, he fails to recognize that it is conservative for us to adopt a shorter time period for
since this may leave some residual correlation between the error terms in one period to the next, and thus our
standard errors would be underestimated. However, for the sake of completeness, we have rerun our analyses,
clustering over product family. The results are presented in Exhibits JT-3a and JT-3b.

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same analysis for his new regressions, and we find that correlation among the error terms
remains.15 (See Exhibits JT-4a and JT-4b.) As before, we used the parameter estimates from
Professor Noll’s regressions to calculate the estimated residual for each of the transactions in the
reseller database. Then, within each family and quarter, we divided the residuals into two equalsize groups and calculated the average residual within the group.16 If Professor Noll is correct in
his assumption that his observations are independent, then the residuals in the two groups should
be independent. In particular, the average residual within each group should be close to zero,
and the residuals from each of the two groups should be uncorrelated with one another. As with
his earlier regressions, neither of these assumptions holds true. The mean residuals are not
grouped around zero, but rather they range from -0.485 to 0.347 for the reseller regression and
from -0.692 to 0.273 for the direct regression.17 Moreover, they are strongly positively
correlated.18 This is the reason that correcting for the correlations within clusters so dramatically
changes his results—his unfounded assumption that the residuals are independent is wrong.
11.

Professor Noll (now) recognizes that the central question is whether the

regression residuals are correlated, but he continues to insist that he does not need to correct for
such correlation. His principal arguments for this are presented below, together with our
comments on each
a) “First, there is no evidence that the residual errors are correlated within a group of
transactions for a given model of iPod in a given calendar quarter.”19 This is
demonstrably incorrect. Our analysis of Professor Noll’s new regressions shows
conclusively that the error terms are correlated.

15

See, e.g., Topel report at ¶29.
We did this for both the Reseller Sales and Direct sales regressions.
17
This is illustrated by the fact that the data points on the graph do not fall neatly into a small area in the middle
(grouped around the co-ordinates 0,0), but rather fall generally in places on the graph other than right around 0,0.
18
This is exactly what is illustrated by our graphs. The 45-degree line indicates the place on the graph at which one
would expect to see all of the paired residuals fall if they were perfectly correlated. While this is clearly not the
case, the fact that the indicators for each of the pairs lie so close to the 45-degree line is shows that the within-cluster
residuals are highly correlated.
19
See Noll rebuttal declaration at 46.
16

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b) “Second, the regressions on iPod transactions were not a sample of types of iPods, but
are based on all transactions. Thus, the iPod data require no correction to adjust for
sampling.”20 Whether the regressions are based on a sample or a database consisting
of all transactions is irrelevant. The issue is not whether you have “all” of the data or
merely a sample, but whether the residuals in the statistical model assumed by
Professor Noll are correlated. When they are, accuracy requires that one account for
the correlation.21 Professor Noll’s assertion that one need not account for the
stochastic properties of the data caused by “sampling” is wrong. As pointed out in
Russell Davidson and James MacKinnon, Econometric Theory and Methods (2004):
“It is common in statistics to speak of the "population" from which a sample is
drawn…The expression is a holdover from the time when statistics was biostatistics,
and the object of study was the human population….In econometrics, the use of the
term population is simply a metaphor. A better concept is that of a data generating
process, or DGP. By this term, we mean whatever mechanism is at work in the real
world of economic activity giving rise to the numbers in our samples, that is,
precisely the mechanism that our econometric model is supposed to describe. A data
generating process is thus the analog in econometrics of a population in biostatistics.
Samples may be drawn from a DGP just as they may be drawn from a population. In
both cases, the samples are assumed to be representative of the DGP or population
from which they are drawn.
Thus, even if one has “all” of the data on, say, Apple prices or US national income,
the very fact that one runs a regression, with residuals, means that one has assumed a
DGP with certain statistical properties.
c) “Third, even if the transactions data were a sample, the sample size within each group
of transactions for each type of iPod is large, as is the number of such groups. The
magnitude of cluster effects diminishes with sample size, and these sample sizes are
large enough to cause the effect of clustering to become unimportant.”22 Again, this

20

See Noll rebuttal declaration at 46.
See, e.g., Angrist and Pischke, Ch. 8, Section 8.2.1 on “Clustering and the Moulton Factor”, at p, 231-236.
Professor Noll has stated that his discussion of clustering is based, in part, on the chapter of Angrist and Pischke in
which this section is contained. (See Noll rebuttal declaration, n. 14.) Although this is the section that is relevant to
this point, there is nothing in there that suggests that the clustering issue only applies to samples and not to an entire
population.
22
See Noll rebuttal declaration at 46.
21

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is simply wrong. It is still necessary to correct the standard errors for correlation even
when one has a large number of groups and a large number of observations within
each group—the calculation of the standard errors corrects for sample size.23
d) “Fourth, variables to account for differences among these groups of transactions are
present in the data set and are included in the regression.”24 Again, this is wrong.
Whatever variables Professor Noll has chosen to include in his new regressions -- and
it is worth emphasizing that he chose to omit relevant and statistically significant
characteristics that materially affect his results—the question is whether the residuals
of those new regressions are correlated or not. They are, and highly so. That
correlation must be accounted for, and Professor Noll refuses to do so.
Professor Noll’s arguments are just noise. As he concedes in his rebuttal report, the only
relevant question is: Are the errors correlated within groups or not? This is relatively easy to
answer – all one needs to do is examine the standard errors with and without clustering. If the
standard errors change significantly once we account for clustering, it shows that the errors are
correlated, and that they are correlated in a way that matters greatly for statistical inference and
significance.25
B. In His New Regressions, Professor Noll Used the Wrong But-for World
12.

The “before and after” methodology used by Professor Noll requires a clear and

meaningful definition of the “before” period, which is the but-for world that would exist in the
absence of the challenged conduct. Professor Noll has changed the specification of his indicator
23

Econometric literature clearly states that large number of clusters not only does not eliminate the need to cluster,
but in fact makes clustering work better (because small number of clusters causes underestimation of clustered
standard errors). See Mostly HarmlessEconometrics: An Empiricist’s Companion, by Angrist and Pischke, at p. 319;
Also see A Practitioner's Guide to Cluster-Robust Inference, by Colin Cameron and Douglas L. Miller (Department
of Economics, University of California - Davis), October 15, 2013, at p. 28.
24
See Noll rebuttal declaration at 46. This statement is incorrect. As we show below, Professor Noll has omitted
several important variables, and thus his new regressions suffer from omitted variable bias. Correcting this bias
does not correct the problem of correlation among the error terms within groups, but Professor Noll refused to
investigate whether his regressions suffered from such bias, let alone investigate whether correcting it would remove
the need to cluster.
25
Professor Noll’s own regressions as presented in his rebuttal declaration exhibits , show that there was correlation
among the error terms in his original methodology. (See Exhibits 1-A to 3-B.) The tests above show that this
correlation remains.

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variables for iTunes 4.7 and iTunes 7.0. He now “turns on” the indicator variable for iTunes 7.0
and “turns off” the indicator variable for iTunes 4.7 for each of the affected models at the time at
which the

feature of iTunes 7.0 was first included in a particular model.26 At the same

time, he includes an indicator variable (Harmony2) for the fact that Harmony began to once
again interoperate with the iPod in April 2005 (about six months after the release of iTunes 4.7).
He explained in his rebuttal declaration and at deposition that he turned off 4.7 when 7.0 was
turned on because 7.0 replaced the previous software represented by 4.7. Thus, the but-for world
is one in which iTunes 4.7 is not replaced by iTunes 7.0.
13.

His treatment of the iTunes 4.7 indicator variable, however, presumes a different

but-for world. By turning this variable off, his but-for world does not include 4.7. Instead he is
comparing the actual world of iTunes 7 to the world that existed in the 3-month period from July
to October of 2004, when iTunes 4.7 was released. This is roughly two years prior to the first
introduction of the challenged technologies in this case, and it assumes that the legal
technologies of iTunes 4.7 would not exist in the but-for-world. On top of this he has layered a
new variable (Harmony2) for the entire period after April 2005, when Harmony could again
interoperate with iTunes 4.7 technology. So his but-for-world is one in which iTunes 4.7
technologies do not exist, but a version of Harmony that interacts with it does. This makes no
sense. Even with his new Harmony2 indicator, a proper specification of the but-for-world would
leave on the indicator for the legal iTunes 4.7 technology. Putting aside other flaws in his model,
this would allow the coefficient on iTunes 7 to represent the incremental effect of iTunes 7; that
is, the but-for world would be the world that existed before the release of iTunes 7.0. As he has
done it, and as explained in our earlier reports, Professor Noll attributes the legal impact of DRM
technologies in iTunes 4.7 to iTunes 7.0 -- a form of omitted variable bias.
14.

To correct Professor Noll’s error, we have rerun his regressions allowing for the

continued existence of the DRM technologies in iTunes 4.7. The effects of this correction are
shown in Column 4 of Exhibits JT-1a and JT-1b. Putting aside the other flaws in his model, in
both cases this correction causes the reported effect of the iTunes_7 variable to decrease – in the

26

See Noll rebuttal declaration at 6.

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case of the reseller regression, the change is small, but in the case of the direct sales regression, it
is more than 50 percent.
15.

In addition, his treatment of the indicator variable for iTunes 7.0 is at odds both

with the facts and with his own stated view. As explained in the Topel report, under plaintiffs
theory, one would expect iTunes 7.0 to impact the demand for iPods that did not have
because, among other things, people with non-iPods and large libraries of music from the RMS
who wanted an iPod may have been “locked out” of the
buy a

by iTunes 7.0, but they could still

If this truly was an issue, one would expect the prices

of other iPods to be impacted. In his recent deposition, Noll agreed that this was a possibility.28
C. Although Professor Noll Changed the Specification of his Model, he Failed to
Include a Number of Characteristics in his New Regressions that are Important in
Explaining the Price of iPods
16.

In his new regressions, Professor Noll adds a variable for the relaunch of

Harmony, changes his treatment of time from logarithmic to scalar, and moves the date on which
the iTS became DRM-free, but omits other significant variables, including variables to account
for attributes of iTunes 7.0 and the iTS and for a number of iPod characteristics or attributes that
one would expect to impact the price of iPods. He claims that his new regression with the new
specifications include all the variables he needs and that adding any additional characteristics
would cause “extreme multicollinearity.”29 However, Professor Noll has done nothing to
investigate either claim. Had he done so, he would have found that he is wrong on both counts.
1. The Omitted iPod Characteristics are Important in Explaining the Variance in
iPod Prices
17.

One way to determine whether a variable or group of variables is important in

explaining the variance in the dependent variable is to examine the statistical significance of
those variables. When the characteristics that we identified, but that Professor Noll ignored, are
added to his preferred regressions, we find that, in the Reseller regression, all but one of them are

27

See Topel report at ¶¶117-122.

28

See Noll Deposition, December 18, 2013, at 51:16-52:5; 55:22-57:9; 65:5-21.

29

Noll rebuttal declaration at 8.

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individually statistically significant, and in the Direct Sales regression all but two of them are
individually statistically significant.30 (See Exhibits JT-5a and JT-5b.) They are also jointly
significant -- that is, they have statistically significant explanatory power when considered as a
group. (See Exhibits JT-5a and JT-5b.31) In fact, as Exhibits JT-5a and JT-5b show, they are
jointly more significant than the indicator variables Professor Noll uses in his analysis and in the
Direct Sales regression, they are more significant than his own characteristics, excluding
memory capacity.32
18.

Professor Noll may, as he has in the past, contend that adding characteristics to

his regressions is unnecessary if it increases the R-squared by a “small” amount.33 This is
irrelevant because it says nothing about the statistical significance of that increase—in statistics,
“small” is determined by the data.

.35

30

For a list of these variables, see Topel report at n. 56, and Exhibit 10 (List of additional characteristics). The
exceptions are log_music_battery_hours which is insignificant in both with a t-statistic of 1.358 in the Reseller
regression and 0.903 in the Direct Sales regression and log_display_inches, which is significant in the Reseller
regression and insignificant in the Direct Sales regression with a t-statistic of 1.656.
31
These exhibits report the joint significance of these variables after clustering by family and quarter. Obviously,
the apparent significance is much greater with unclustered standard errors, but the pattern remains the same. (See
Appendix D.)
32

33

“When Professor Topel adds more variables that measure technical characteristics to the regression equation, Rsquared increases by .0063 in the reseller equation and by .00053 in the direct sales regression.” Noll rebuttal
declaration, Note 8 at 30.
34
R-squared is an indication of the fraction of variation in the dependent variable that is explained by the variables
included in the regression equation. As such, it can never be more than 1.0000, i.e., the included variables can never
explain more than 100 percent of the variation in the dependent variable.
35
The number is actually 47 percent. The corresponding numbers for the direct sales regression are as follows: the
R2 in Professor Noll’s regression is .9816. With the additional characteristics, the R2 is .9886. The difference is
.0050 out of .0184, or 27 percent.

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.36
2. Adding our Characteristics to Professor Noll’s Regressions does not Result in
“Extreme Multicollinearity”
19.

Professor Noll also claims that he did not add characteristics other than Harmony2

and making an adjustment to the date on which the iTS became DRM-free because adding other
characteristics would cause “extreme multicollinearity.”37 “Multicollinearity” refers to a
situation in which a variable, or set of variables, is highly correlated with other variables in the
model. The problem this creates is one of precision in estimating the model’s coefficients. As a
well-known econometrics textbook puts it: “the data simply do not contain enough information
to allow us to obtain precise estimates of all of the coefficients.”38 Multicollinearity is related to
the problem of “omitted variables bias” in which the variable that is included in the regression
(say, iTunes 7) “picks up” the true effects of omitted variables (say enhanced video) with which
it is correlated.
20.

Professor Noll did not examine whether adding characteristics would cause a

multicollinearity problem. Had he done so, he would have found none. The characteristics that
he omitted from his new regressions are statistically significant predictors of prices. These
independent effects can be estimated because, to paraphrase the econometrics text cited above,
“the data [do] contain enough information to allow us to obtain precise estimates of all of the
coefficients.” By not including these characteristics in his regressions, the regressions are using
omitted variables bias to “find” effects that are not there.
21.

A final point on collinearity. One way to determine whether a variable is affected

by collinearity with other variables is to calculate the change in its estimated standard error when

36

And, we note that, in both cases, omitting the variable iTunes_7 has a smaller effect on the R2 than does omitting
these additional characteristics. In fact, it has no detectable effect in the reseller sales regression, and it has a
negative effect in the direct sales regression where the reported Adj. R-squared actually falls from 0.9816 to 0.9815.
Thus, if Professor Noll’s logic was correct, the variable for iTunes_7 does not add to the explanatory power of the
regression and thus, presumably should not have been included in the regression.
37
See Noll rebuttal declaration at 8.
38
See Econometric Theory and Methods (2004), by Russell Davidson and James MacKinnon, p103-104.

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the other variables are added to the regression.39 If collinearity is an issue, inclusion of the
additional variables will cause the estimated standard error to increase substantially. Adding the
product characteristics mentioned above does not substantially increase the estimated standard
error on the iTunes 7 coefficient. In fact, in the reseller regression, inclusion of these statistically
significant predictors actually reduces the standard error on the iTunes 7 coefficient. (See
Exhibits JT-6a and JT-6b, which present the Noll regression results reporting standard errors
instead of t-statistics.)40
3. Professor Noll’s New Regressions Suffer from Omitted Variable Bias
22.

As noted above, the danger in omitting variables (Z) that affect the outcome of

interest (here, iPod prices) is that included variables (X) correlated with Z will “pick up” the
effects of the omitted variables. The estimated coefficients on variables X will be biased. This
is called “omitted variable bias.”41 Then adding the previously omitted variables to the
regression will cause the coefficients on X to change by a material amount. This is exactly what
happens with the coefficient on the iTunes_7 indicator variable. In both the reseller regression
and the direct sales regressions, when the proper but-for world is taken into account, the iTunes
coefficient falls dramatically when the incorrectly omitted variables are added to Professor
Noll’s regressions.

II.

PROFESSOR NOLL’S REBUTTAL REPORT INTRODUCES A NEW
THEORY OF IMMEDIATE IMPACT
23.

Professor Noll argues for the first time in his rebuttal declaration that iTunes 7.0

would have immediately affected iPod prices because of its lock-out effect on owners of RMS
music. This is at odds with what he said before about the impact of lock-in. Until now,
39

See A Course in Econometrics, by Goldberger (1991), Chapter-Multicollinearity 23, at 245, 251-252.
Although it is not reported in these exhibits, we have included the full regression results in Appendix D3. These
results show that the standard error on the dummy variable for the Shuffle goes up dramatically, a clear indication
that at least one of the newly included variables is collinear with the Shuffle. However, since the magnitude of the
coefficient on Shuffle variable is of no practical interest in this context, this collinearity is irrelevant.
41
Professor Noll himself is well aware that his regressions may suffer from omitted variable bias. “[I]f this is a
systematic problem over the entire data set, it would say that you need some more variables, which I readily
conclude, you need more variables. This isn’t a regression that I would use to calculate damages because I don’t
have enough information in it or enough variables in it.” (See Noll Deposition, April 7, 2011 at 120:22-121:2); See
Also Expert Report of Dr. Michelle M. Burtis, filed April 11, 2011 (“April 2011 Burtis Report”) at ¶7.
40

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Professor Noll’s principal claim was that iTunes 7.0 increased lock-in, which ultimately
increased demand and prices for iPods. He claimed that impact from lock-in would not have
been immediate, but would have occurred over time. He repeats the point in his rebuttal
declaration on pages 7 and 27, noting that the impact would not occur until customers purchased
replacement players which would be some time after the introduction of iTunes 7.0.
24.

In his rebuttal declaration, Professor Noll argues for the first time that iTunes 7.0

would have had an immediate impact on iPod price because of its lock-out effect on owners of
non-iPods that play RMS music. However, he presents no evidence that either the facts of this
case or the conditions in the marketplace support his new theory. First, Professor Noll’s lock-in
theory requires that, in the absence of iTunes 7.0, a substantial fraction of iPod owners would
have purchased their music from the RMS, but because Apple released iTunes 7.0, those owners
were “forced” to purchase their music from the iTS instead. As we showed in our earlier reports,
RealNetworks’ Harmony was such a small presence in the marketplace that it could not have had
this impact that Professor Noll hypothesizes.42 Professor Noll’s lock-out theory, on the other
hand, requires that there be a relatively large population of owners of digital media players who
have large quantities RMS music that Apple deliberately locks out with

43

But just as its

small presence in the marketplace renders Harmony ineffective in locking iPod owners in, so too
does it render Harmony ineffective in affecting the price of iPods by locking owners of other
MP3 players out of the iPod market. The RMS just was not very important, regardless of which
theory Professor Noll uses.
25.

Notwithstanding Professor Noll’s claims in his rebuttal report that iTunes 7.0

caused Apple to increase prices of iPods and his statement at deposition that he expected that
iTunes 7.0 had no impact on prices of non-iPods, Apple continued to compete successfully with
manufacturers of non-iPod digital music players.

42
43

See Murphy report at ¶¶13a, 65, 66 and n. 115 and Exhibits 15a and 15b.
Noll rebuttal declaration at 7.

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.45 This shows that Apple had, and continued to
have, an incentive to compete with non-iPod manufacturers on price. Had Apple raised its prices
while non-iPod manufacturers maintained their current prices as Professor Noll claims they
would, Apple would have lost not only customers who were allegedly locked out because of their
RMS purchases, but also customers who were not locked out including those who were new to
digital music players. In light of these facts, it is implausible to think that Apple would find it in
its interests to raise the price of iPods at the time it released iTunes 7.0.
26.

To the extent that Professor Noll claims that Apple increased the price of the

anticipation of

impact on demand, it is complete speculation. There is no

evidence that shows (and Professor Noll testified that he was unaware of any) that, when Apple
determined the price for the iPod

, it examined the impact that the

would have on the elasticity of demand for iPod purchasers or for non-iPod purchasers with
RMS libraries or on how many people would be locked out. In fact, there is no evidence that
Apple took

into account at all when determining the price.

44

45

These numbers assume, conservatively (and contrary to economic fact), that Apple was not competing with other
manufacturers for sales to buyers who were either replacing an existing iPod or adding to an existing stock of MP3
players, both iPod and non-iPod.

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___________________________________
Kevin M. Murphy

__________________________________
Robert H. Topel

December 20, 2013

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Exhibit JT-4a
Average of Regression Residuals
Divided Randomly in Two Groups, by Cluster
(Resellers Sales, Clusters Defined by Family and Year-Quarter)

0.5
0.4

Average of Group #2 residuals

0.3
0.2
0.1
0
-0.1
-0.2

-0.3
-0.4
-0.5
-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

Average of Group #1 residuals
Cluster residual averages

Sources: Apple iPod Sales Data

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45-degree line

0.2

0.3

0.4

0.5

Exhibit JT-4b
Average of Regression Residuals
Divided Randomly in Two Groups, by Cluster
(Direct Sales, Clusters Defined by Family and Year-Quarter)

0.8

Average of Group #2 residuals

0.6
0.4
0.2
0
-0.2
-0.4
-0.6
-0.8
-0.8

-0.6

-0.4

-0.2

0

0.2

Average of Group #1 residuals
Cluster residual averages

Sources: Apple iPod Sales Data

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45-degree line

0.4

0.6

0.8

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Appendix A

Curriculum Vitae

Kevin M. Murphy
December 2013
Business Address:

Home Address:

University of Chicago
Booth School of Business
5807 South Woodlawn Avenue
Chicago, Illinois 60637
email: [e-mail]

1810 Pennington Court
New Lenox, Illinois 60451
Phone: [phone]
Fax: [phone]

Current Positions
July 2005-Present: George J. Stigler Distinguished Service Professor of Economics,
Department of Economics and Booth School of Business, University of Chicago
Faculty Research Associate, National Bureau of Economic Research
Education
University of California, Los Angeles, A.B., Economics, 1981
University of Chicago, Ph.D., 1986
Thesis Topic: Specialization and Human Capital
Previous Research and Academic Positions
2002-2005: George J. Stigler Professor of Economics, Department of Economics and
Booth School of Business, University of Chicago
1993 – 2002: George Pratt Shultz Professor of Business Economics and Industrial
Relations, University of Chicago
1989 – 1993: Professor of Business Economics and Industrial Relations, University of
Chicago
1988 – 1989: Associate Professor of Business Economics and Industrial Relations,
University of Chicago

1986 – 1988: Assistant Professor of Business Economics and Industrial Relations,
University of Chicago
1983 – 1986: Lecturer, Booth School of Business, University of Chicago
1982 – 1983: Teaching Associate, Department of Economics, University of Chicago
1979 – 1981: Research Assistant, Unicon Research Corporation, Santa Monica, California
Honors and Awards
2008: John von Neumann Lecture Award, Rajk College, Corvinus University, Budapest
2007: Kenneth J. Arrow Award (with Robert H. Topel)
October 2005: Garfield Research Prize (with Robert H. Topel)
September 2005: MacArthur Foundation Fellow
1998: Elected to the American Academy of Arts & Sciences
1997: John Bates Clark Medalist
1993: Fellow of The Econometric Society
1989 – 1991: Sloan Foundation Fellowship, University of Chicago
1983 – 1984: Earhart Foundation Fellowship, University of Chicago
1981 – 1983: Fellowship, Friedman Fund, University of Chicago
1980 – 1981: Phi Beta Kappa, University of California, Los Angeles
1980 – 1981: Earhart Foundation Fellowship, University of California, Los Angeles
1979 – 1981: Department Scholar, Department of Economics, University of California,
Los Angeles
Publications
Books
Social Economics: Market Behavior in a Social Environment with Gary S. Becker,
Cambridge, MA: Harvard University Press (2000).
Measuring the Gains from Medical Research: An Economic Approach edited volume
with Robert H. Topel, Chicago: University of Chicago Press (2003).

-2-

Articles
“Government Regulation of Cigarette Health Information,” with Benjamin Klein and
Lynne Schneider, 24 Journal of Law and Economics 575 (1981).
“Estimation and Inference in Two-Step Econometric Models,” with Robert H. Topel, 3
Journal of Business and Economic Statistics 370 (1985).
“Unemployment, Risk, and Earnings: Testing for Equalizing Wage Differences in the
Labor Market,” with Robert H. Topel, in Unemployment and the Structure of Labor
Markets, pp. 103-139, ed. Kevin Lang and Jonathan S. Leonard. London: Basil Blackwell
(1987).
“The Evolution of Unemployment in the United States: 1968-1985,” with Robert H.
Topel, in NBER Macroeconomics Annual, pp. 11-58, ed. Stanley Fischer. Cambridge,
MA: MIT Press (1987).
“Cohort Size and Earnings in the United States,” with Mark Plant and Finis Welch, in
Economics of Changing Age Distributions in Developed Countries, pp. 39-58, ed.
Ronald D. Lee, W. Brian Arthur, and Gerry Rodgers. Oxford: Clarendon Press, (1988).
“The Family and the State,” with Gary S. Becker, 31 Journal of Law and Economics 1 (1988).
“A Theory of Rational Addiction,” with Gary S. Becker, 96 Journal of Political Economy 675
(1988).
“Vertical Restraints and Contract Enforcement,” with Benjamin Klein, 31 Journal of Law
and Economics 265 (1988).
“Income Distribution, Market Size, and Industrialization,” with Andrei Shleifer and
Robert W. Vishny, 104 Quarterly Journal of Economics 537 (1989).
“Wage Premiums for College Graduates: Recent Growth and Possible Explanations,”
with Finis Welch, 18 Educational Researcher 17 (1989).
“Industrialization and the Big Push,” with Andrei Shleifer and Robert W. Vishny, 97
Journal of Political Economy 1003 (1989).
“Building Blocks of Market Clearing Business Cycle Models,” with Andrei Shleifer and
Robert W. Vishny, in NBER Macroeconomic Annual, pp. 247-87, ed. Olivier Jean
Blanchard and Stanley Fischer. Cambridge, MA: MIT Press (1989).
“Efficiency Wages Reconsidered: Theory and Evidence,” with Robert H. Topel, in
Advances in the Theory and Measurement of Unemployment, pp. 204-240. ed. Yoram
Weiss and Gideon Fishelson. London: Macmillan, (1990).

-3-

“Empirical Age-Earnings Profiles,” with Finis Welch, 8 Journal of Labor Economics 202
(1990).
“Human Capital, Fertility, and Economic Growth,” with Gary S. Becker and Robert F.
Tamura, 98 Journal of Political Economy, S12 (1990).
“Accounting for the Slowdown in Black-White Wage Convergence,” with Chinhui Juhn
and Brooks Pierce, in Workers and Their Wages: Changing Patterns in the United States,
pp. 107-143, ed. Marvin Kosters. Washington, D.C.: American Enterprise Institute
(1991).
“The Role of International Trade in Wage Differentials,” with Finis Welch, in Workers
and Their Wages: Changing Patterns in the United States, pp. 39- 69, ed. Marvin Kosters.
Washington, D.C.: American Enterprise Institute (1991).
“Why Has the Natural Rate of Unemployment Increased over Time?” with Robert H.
Topel and Chinhui Juhn, 2 Brookings Papers on Economic Activity 75 (1991).
“The Allocation of Talent: Implications for Growth,” with Andrei Shleifer and Robert
W. Vishny, 106 Quarterly Journal of Economics 503 (1991).
“Rational Addiction and the Effect of Price on Consumption,” with Gary S. Becker and
Michael Grossman, 81 American Economic Review 237 (1991).
“Wages of College Graduates,” in The Economics of American Higher Education, pp.
121-40, ed. William E. Becker and Darrell R. Lewis. Boston: Kluwer Academic
Publishers (1992).
“Changes in Relative Wages, 1963-1987: Supply and Demand Factors,” with Lawrence F.
Katz, 107 Quarterly Journal of Economics 35 (1992).
“The Structure of Wages,” with Finis Welch. 107 Quarterly Journal of Economics 285 (1992).
“The Transition to a Market Economy: Pitfalls of Partial Planning Reform,” with Andrei
Shleifer and Robert W. Vishny, 107 Quarterly Journal of Economics 889 (1992).
“The Division of Labor, Coordination Costs, and Knowledge,” with Gary S. Becker, 107
Quarterly Journal of Economics 1137 (1992).
“Industrial Change and the Rising Importance of Skill” with Finis Welch, in Uneven
Tides: Rising Inequality in America, pp. 101-132, ed. Peter Gottschalk and Sheldon
Danziger. New York: Russell Sage Foundation Publications (1993).
“Wage Inequality and the Rise in Returns to Skill,” with Chinhui Juhn and Brooks Pierce,
101 Journal of Political Economy 410 (1993).

-4-

“Occupational Change and the Demand for Skill, 1940-1990,” with Finis Welch, 83
American Economic Review 122 (1993).
“Inequality and Relative Wages,” with Finis Welch, 83 American Economic Review 104
(1993).
“Why Is Rent-Seeking So Costly to Growth?” with Andrei Shleifer and Robert W.
Vishny, 83 American Economic Review 409 (1993).
“A Simple Theory of Advertising as a Good or Bad,” with Gary S. Becker, 108 Quarterly
Journal of Economics 941 (1993).
“Relative Wages and Skill Demand, 1940-1990,” with Chinhui Juhn, in Labor Markets,
Employment Policy, and Job Creation, pp. 343-60, ed. Lewis C. Solmon and Alec R.
Levenson. The Milken Institute Series in Economics and Education. Boulder, CO:
Westview Press, (1994).
“Cattle Cycles,” with Sherwin Rosen and Jose A. Scheinkman, 102 Journal of Political
Economy 468 (1994).
“An Empirical Analysis of Cigarette Addiction,” with Gary S. Becker and Michael
Grossman, 84 American Economic Review 396 (1994).
“Inequality in Labor Market Outcomes: Contrasting the 1980s and Earlier Decades,”
with Chinhui Juhn, 1 Economic Policy Review 26 (1995).
“Employment and the 1990-91 Minimum Wage Hike,” with Donald R. Deere and Finis
Welch, 85 American Economic Review 232 (1995).
“Examining the Evidence on Minimum Wages and Employment,” with Donald R. Deere
and Finis Welch, in The Effects of the Minimum Wage on Employment, pp. 26-54, ed.
Marvin H. Kosters. Washington, D.C.: The AEI Press, (1996).
“Social Status, Education, and Growth,” with Chaim Fershtman and Yoram Weissm, 104
Journal of Political Economy 108 (1996).
“Wage Inequality and Family Labor Supply,” with Chinhui Juhn, 15 Journal of Labor
Economics 72 (1997).
“Quality and Trade,” with Andrei Shleifer, 53 Journal of Development Economics 1 (1997).
“Wage Inequality and Family Labor Supply,” with Chinhui Juhn, 15 Journal of Labor
Economics 72 (1997).
“Vertical Integration as a Self-Enforcing Contractual Arrangement,” with Benjamin
Klein, 87 American Economic Review 415 (1997).

-5-

“Unemployment and Nonemployment,” with Robert H. Topel, 87 American Economic
Review 295 (1997).
“Wages, Skills, and Technology in the United States and Canada,” with W. Craig Riddell
and Paul M. Romen, in General Purpose Technologies and Economic Growth, pp. 283309, ed. Elhanan Helpman. Cambridge, MA: M.I.T. Press, (1998).
“Perspectives on the Social Security Crisis and Proposed Solutions,” with Finis Welch, 88
American Economic Review 142 (1998).
“Population and Economic Growth,” with Gary S. Becker and Edward Glaeser, 89
American Economic Review 145 (1999).
“A Competitive Perspective on Internet Explorer,” with Steven J. Davis, 90 American
Economic Review 184 (2000).
“Industrial Change and the Demand for Skill” with Finis Welch, in The Causes and
Consequences of Increasing Inequality, pp. 263-84, ed. Finis Welch. Volume II in the
Bush School Series in the Economics of Public Policy. Chicago: University of Chicago
Press, (2001).
“Wage Differentials in the 1990s: Is the Glass Half Full or Half Empty?” with Finis
Welch, in The Causes and Consequences of Increasing Inequality, pp. 341-64, ed. Finis Welch.
Volume II in the Bush School Series in the Economics of Public Policy. Chicago:
University of Chicago Press, (2001).
“Economic Perspectives on Software Design: PC Operating Systems and Platforms,”
with Steven J. Davis and Jack MacCrisken, in Microsoft, Antitrust, and the New
Economy: Selected Essays, pp. 361-420, ed. Davis S. Evans. Boston, MA: Kluwer,
(2001).
“Current Unemployment, Historically Contemplated,” with Robert H. Topel and
Chinhui Juhn, 1 Brookings Papers on Economic Activity 79 (2002).
“The Economics of Copyright ‘Fair Use’ in A Networked World,” with Andres Lerner
and Benjamin Klein, 92 American Economic Review 205 (2002).
“The Economic Value of Medical Research” with Robert H. Topel, in Measuring the
Gains from Medical Research: An Economic Approach, pp. 41-73, ed. Robert H. Topel
and Kevin M. Murphy. Chicago: University of Chicago Press, (2003).
“School Performance and the Youth Labor Market,” with Sam Peltzman, 22 Journal of
Labor Economics 299 (2003).
“Entrepreneurial ability and market selection in an infant industry: evidence from the
Japanese cotton spinning industry,” with Atsushi Ohyama and Serguey Braguinsky, 7
Review of Economic Dynamics 354 (2004).

-6-

“Entry, Pricing, and Product Design in an Initially Monopolized Market,” with Steven J.
Davis and Robert H. Topel, 112 Journal of Political Economy: S188 (2004).
“Diminishing Returns: The Costs and benefits of Increased Longevity,” with Robert H.
Topel, 46 Perspectives in Biology and Medicine S108 (2004).
“Persuasion in Politics,” with Andrei Shleifer, 94 American Economic Review 435 (May
2004).
“Black-White Differences in the Economic Value of Improving Health,” with Robert H.
Topel, 48 Perspectives in Biology and Medicine S176 (2005).
“The Equilibrium Distribution of Income and the Market for Status,” with Gary S.
Becker and Iván Werning, 113 Journal of Political Economy 282 (2005).
“The Market for Illegal Goods: The Case of Drugs,” with Gary S. Becker and Michael
Grossman, 114 Journal of Political Economy 38 (2006).
“Competition in Two Sided Markets: The Antitrust Economics of Payment Card
Interchange Fees,” with Benjamin Klein, Kevin Green, and Lacey Place, 73 Antitrust Law
Journal 571 (2006).
“The Value of Health and Longevity,” with Robert H. Topel, 114 Journal of Political
Economy 871 (2006).
“Social Value and the Speed of Innovation,” with Robert H. Topel, 97 American Economic
Review 433 (2007).
“Education and Consumption: The Effects of Education in the Household Compared to
the Marketplace,” with Gary S. Becker, 1 The Journal of Human Capital 9 (Winter 2007).
“Why Does Human Capital Need a Journal?” with Isaac Ehrlich, 1 The Journal of Human
Capital 1 (Winter 2007).
“Critical Loss Analysis in the Whole Foods Case,” with Robert H. Topel, 3 (2) GCP
Magazine (March 2008).
“Exclusive Dealing Intensifies Competition for Distribution,” with Benjamin Klein,
Antitrust Law Journal, Vol. 75 (October 2008).
“Fertility Decline, the Baby Boom and Economic Growth,” with Curtis Simon and
Robert Tamura, 2 The Journal of Human Capital 3 (Fall 2008).
“The Market for College Graduates and the Worldwide Boom in Higher Education of
Women,” with Gary S. Becker and William H. J. Hubbard, 100 American Economic Review:
Papers & Proceedings 229 (May 2010).

-7-

"Explaining the Worldwide Boom in Higher Education of Women," with Gary S. Becker
and William H. J. Hubbard," 4 Journal of Human Capital No. 3 (2010).
“How Exclusivity is Used to Intensify Competition for Distribution-Reply to Zenger”
with Benjamin Klein, 77 Antitrust Law Journal No. 2 (2011).
“Achieving Maximum Long-Run Growth,” Federal Reserve Bank of Kansas City Proceedings of
the Annual Jackson Hole Conference 2011.
“On the Economics of Climate Policy,” with Gary. S. Becker and Robert. H. Topel, 10
B.E. Journal of Economic Analysis and Policy No. 2 (2011).
“Measuring Crack Cocaine and its Impact,” with Fryer, R. G., P. S. Heaton, and S. D.
Levitt, 51 Economic Inquiry No. 3 (July 2013).
“Some Basic Economics of National Security,” with Robert H. Topel, 103 American
Economic Review No. 3 (2013).
Selected Working Papers
“Gauging the Economic Impact of September 11th,” with Gary S. Becker, Unpublished
Working Paper (October 2001).
“War In Iraq Versus Containment: Weighing the Costs,” with Steven J. Davis and Robert
H. Topel, NBER Working Paper No.12092 (March 2006).
“Estimating the Effect of the Crack Epidemic,” with Steve Levitt and Roland Fryer,
Unpublished Working Paper (September 2006).
“The Interaction of Growth in Population and Income,” with Gary S. Becker,
Unpublished Working Paper (2006).
“Persuasion and Indoctrination,” with Gary Becker (2007).
“The Value of Life Near Its End and Terminal Care,” with Gary S. Becker and Tomas
Philipson (2007).
“On the Economics of Climate Policy,” with Gary S. Becker and Robert H. Topel,
Working Paper No. 234 (January 2010, Revised September 2010).
“The Collective Licensing of Music Performance Rights: Market Power, Competition and
Direct Licensing” (March 2013).
“Competitive Discounts and Antitrust Policy,” with Edward Snyder and Robert Topel
(March 2013).

-8-

Selected Comments
Comment on “Causes of Changing Earnings Equality,” by Robert Z. Lawrence. Federal
Reserve Bank of Kansas City (1998).
“Comment: Asking the Right Questions in the Medicare Reform Debate,” Medicare
Reform: Issues and Answers, pp. 175-81, ed. Andrew J. Rettenmaier and Thomas R.
Saving. Chicago: University of Chicago Press (2000).
Comment on “Social Security and Demographic Uncertainty,” by Henning Bohn in Risk
Aspects of Investment-Based Social Security Reform, ed. John Y. Campbell and Martin
Feldstein. Chicago: University of Chicago Press (2001.)
Comment on “High Technology Industries and Market Structure,” by Hal R. Varian.
Federal Reserve Bank of Kansas City (2001).
Popular Press Articles
“The Education Gap Rap,” The American Enterprise, (March-April 1990), pp. 62.
“Rethinking Antitrust,” with Gary S. Becker, Wall Street Journal, (February 26, 2001) pp.
pA22.
“Prosperity Will Rise Out of the Ashes,” with Gary S. Becker, Wall Street Journal,
(October 29, 2001) pp. pA22.
“The Economics of NFL Team Ownership” with Robert H. Topel, report prepared at
the request of the National Football League Players’ Association. (January 2009).
Articles About Murphy
“Higher Learning Clearly Means Higher Earning,” by Carol Kleiman. Chicago Tribune,
March 12, 1989, Jobs Section pp. 1. Long article about “The Structure of Wages” with
picture of Murphy.
“Why the Middle Class Is Anxious,” by Louis S. Richman. Fortune, May 21, 1990, pp. 106.
Extensive reference to Murphy's work on returns to education.
“Unequal Pay Widespread in U.S.,” by Louis Uchitelle., New York Times, August 14, 1990,
Business Day section pp. 1. Long piece on income inequality.
“One Study’s Rags to Riches Is Another’s Rut of Poverty,” by Sylvia Nasar, New York
Times, June 17, 1992, Business Section pp. 1. Long piece on the income inequality
research.

-9-

“Nobels Pile Up for Chicago, but Is the Glory Gone?” by Sylvia Nasar, New York Times
November 4, 1993, Business Section pp. 1. Long piece on Chicago School of economics.
Featured a photo of five of the “brightest stars on the economics faculty” (including
Murphy) and a paragraph about Murphy’s research.
“This Sin Tax is Win-Win,” by Christopher Farrell. Business Week, April 11, 1994, pp. 30.
Commentary section refers to Murphy, Becker, and Grossman’s work on rational
addiction.
“Growing inequality and the economics of fragmentation,” by David Warsh, Boston
Sunday Globe, August 21, 1994, pp. A1. Two-page article with picture and biographical
details about Murphy and his research; part of a series about “how the new generation
replaced the old in economics.”
“A Pay Raise’s Impact,” by Louis Uchitelle. New York Times, January 12, 1995, Business
Section pp. 1. Article about consequences of proposed increase in the minimum wage.
Articles featuring Murphy's comments on the minimum wage appeared in numerous
other publications, including the Chicago Tribune; in addition, Murphy was interviewed on
CNN (January 26, 1995).
“The Undereducated American,” Wall Street Journal, August 19, 1996, pp. A12. Changes
in the rate of returns to education.
“In Honor of Kevin M. Murphy: Winner of the John Bates Clark Medal,” by Finis
Welch, 14 Journal of Economic Perspectives 193 (2000).
Testimony, Reports, and Depositions (Last 4 Years)
Final Submission of Kevin M. Murphy, January 16, 2009, in the 2006 MSA Adjustment
Proceeding.
Expert Report of Kevin M. Murphy, January 23, 2009, in the Matter of City of New York
v. Amerada Hess Corp., et al., The United States District Court for the Southern District
of New York. Report submitted on behalf of Citgo Petroleum Corporation.
Declaration of Kevin M. Murphy, January 29, 2009, in the Matter of Insignia Systems,
Inc. v. News America Marketing In-Store, Inc., The United States District Court for the
District of Minnesota.
Deposition of Kevin M. Murphy, February 10, 2009, in the Matter of Valassis
Communications, Inc. v. News America Incorporated, a/k/a News America Marketing
Group, News America FSI, Inc. a/k/a News America Marketing FSI, LLC and News
America Marketing In-Store Services, Inc. a/a/a News American Marketing In-Store
Services, LLC., The United States Third Circuit Court of Michigan Detroit Division.
Case No. 07-706645.

- 10 -

Expert Report of Kevin M. Murphy, February 13, 2009, in the Matter of City of New
York v. Amerada Hess Corp., et al., The United States District Court for the Southern
District of New York. Report submitted on behalf of Citgo Petroleum Corporation
regarding Citgo’s share of total RFG supply at the New York Harbor.
Expert Report of Kevin M. Murphy, March 3, 2009, in the Matter of St. Francis Medical
Center, on behalf of itself and all others similarly situated vs. C.R. Bard, Inc., The United
States District Court for the Eastern District of Missouri Southeastern Division.
Deposition of Kevin M. Murphy, March 6, 2009, in the Matter of St. Francis Medical
Center, on behalf of itself and all others similarly situated vs. C.R. Bard, Inc., The United
States District Court for the Eastern District of Missouri Southeastern Division.
Expert Report of Kevin M. Murphy, March 17, 2009, in the Matter of ZF Meritor LLC
and Meritor Transmission Corporation v. Eaton Corporation., The United States District
Court of Delaware. Case No. 06-CV-623.
Deposition of Kevin M. Murphy, April 6, 2009, in the Matter of ZF Meritor LLC and
Meritor Transmission Corporation v. Eaton Corporation., The United States District
Court of Delaware. Case No. 06-CV-623.
Declaration of Kevin M. Murphy, April 16, 2009, in the Matter of Sun Microsystems,
Inc., a California corporation v. Hynix Semiconductor Inc., et al., The United States
District Court Northern District of California San Francisco Division.
Declaration of Kevin M. Murphy, April 23, 2009, in the Matter of Sun Microsystems,
Inc., a California corporation v. Hynix Semiconductor Inc., a Korean corporation, Hynix
Semiconductor America Inc., a California corporation, et al., The United States District
Court Northern District of California San Francisco Division.
Expert Report of Kevin M. Murphy, May 11, 2009, in the Matter of Jim Hood, Attorney
General ex rel State of Mississippi v. Microsoft Corporation., The Chancery Court of
Hinds County First Judicial District.
Expert Report of Professor Kevin M. Murphy, June 12, 2009, in the Matter of CITGO
Petroleum Corporation v. Ranger Enterprises, Inc., The United States District Court for
the Western District of Wisconsin.
Expert Report of Kevin M. Murphy, June 24, 2009, in the Matter of Novell,
Incorporated v. Microsoft Corporation., The United States District Court Northern
District of Maryland.

- 11 -

Trial Testimony of Kevin M. Murphy, July 16, 2009, in the Matter of Valassis
Communications, Inc. v. News America Incorporated, a/k/a News America Marketing
Group, News America FSI, Inc. a/k/a News America Marketing FSI, LLC and News
America Marketing In-Store Services, Inc. a/a/a News American Marketing In-Store
Services, LLC., The United States Third Circuit Court of Michigan Detroit Division.
Case No. 07-706645.
Declaration of Kevin M. Murphy, August 14, 2009, in the Matter of EBay Seller Antitrust
Litigation, The United States District Court for the Northern District of California.
Declaration submitted in support of defendant Ebay Inc.’s motion for summary
judgment.
Expert Report of Kevin M. Murphy, August 21, 2009, in the Matter of Go Computer,
Inc., and S. Jerrold Kaplan v. Microsoft Corporation., The Superior Court for the State
of California for the City and County of San Francisco.
Deposition of Kevin M. Murphy, September 16, 2009, in the Matter of Novell,
Incorporated v. Microsoft Corporation., The United States District Court Northern
District of Maryland.
Deposition of Kevin M. Murphy, September 21, 2009, in the Matter of Ebay Seller
Antitrust Litigation, The United States District Court for the Northern District of
California. Deposition in support of defendant Ebay Inc.’s motion for summary
judgment.
Expert Report of Kevin M. Murphy, September 29, 2009, in the Matter of Motor Fuel
Temperature Sales Litigation, The United States District Court of Kansas.
Trial Testimony of Kevin M. Murphy, October 1, 2009, in the Matter of ZF Meritor LLC
and Meritor Transmission Corporation v. Eaton Corporation., The United States District
Court of Delaware. Case No. 06-CV-623.
Declaration of Kevin M. Murphy, October 16, 2009, in the Matter of Ebay Seller
Antitrust Litigation, The United States District Court for the Northern District of
California. Declaration in further support of defendant Ebay Inc.’s motion for summary
judgment.
Expert Report of Kevin M. Murphy, October 20, 2009, in the Matter of Advanced Micro
Devices, Inc., and AMD International Sales & Service, LTD v. Intel Corporation and
Intel Kabushiki Kaisha., The United States District Court for the District of Delaware.
Deposition of Kevin M. Murphy, October 24, 2009, in the Matter of Go Computer, Inc.,
and S. Jerrold Kaplan v. Microsoft Corporation., The Superior Court for the State of
California for the City and County of San Francisco.
Deposition of Kevin M. Murphy, October 26, 2009, in the Matter of Motor Fuel
Temperature Sales Litigation, The United States District Court of Kansas.

- 12 -

Expert Report of Kevin M. Murphy, December 14, 2009, in the Matter of Payment Card
Interchange Fee and Merchant Discount Antitrust Litigation, The United States District
Court for the Eastern District of New York.
Supplemental Expert Report of Kevin M. Murphy, December 21, 2009, in the Matter of
Valassis Communications, Inc. v. News America Incorporated, a/k/a News America
Marketing Group, News America FSI, Inc. a/k/a News America Marketing FSI, LLC
and News America Marketing In-Store Services, Inc. a/a/a News American Marketing
In-Store Services, LLC., The United States Third Circuit Court of Michigan Detroit
Division. Case No. 07-706645.
Trial Testimony of Kevin M. Murphy, January 11, 2010, in the Matter of Go Computer,
Inc., and S. Jerrold Kaplan v. Microsoft Corporation., The Superior Court for the State
of California for the City and County of San Francisco.
Supplemental Rebuttal Expert Report of Kevin M. Murphy, January 14, 2010, in the
Matter of Valassis Communications, Inc. v. News America Incorporated, a/k/a News
America Marketing Group, News America FSI, Inc. a/k/a News America Marketing FSI,
LLC and News America Marketing In-Store Services, Inc. a/a/a News American
Marketing In-Store Services, LLC., The United States Third Circuit Court of Michigan
Detroit Division. Case No. 07-706645.
Deposition of Kevin M. Murphy, January 26, 2010, in the Matter of Valassis
Communications, Inc. v. News America Incorporated, a/k/a News America Marketing
Group, News America FSI, Inc. a/k/a News America Marketing FSI, LLC and News
America Marketing In-Store Services, Inc. a/a/a News American Marketing In-Store
Services, LLC., The United States Third Circuit Court of Michigan Detroit Division.
Case No. 07-706645.
Declaration of Kevin M. Murphy, January 28, 2010, in the Matter of Automobile
Antitrust Cases I and II., The United States Superior Court of the State of California for
the County of San Francisco.
Declaration of Kevin M. Murphy, April 2, 2010, in the Matter of the Application for the
Determination of Interim License Fees for The Cromwell Group, Inc. and Affiliates, et
al., The United States District Court Southern District of New York.
Deposition of Kevin M. Murphy, April 13-14, 2010, in the Matter of Payment Card
Interchange Fee and Merchant Discount Antitrust Litigation., The United States District
Court for the Eastern District of New York.
Supplemental Expert Report of Kevin M. Murphy, June 1, 2010, in the Matter of
Insignia Systems, Inc. v. News America Marketing In-Store, Inc. (corrected June 8,
2010)., The United States District Court for the District of Minnesota.

- 13 -

Expert Report of Kevin M. Murphy, June 21, 2010, in the Matter of Applications of
Comcast Corporation, General Electric Company and NBC Universal, Inc., for Consent
to Assign Licenses or Transfer Control of Licensees., Federal Communications
Commission.
Supplement to Expert Report of Kevin M. Murphy, June 24, 2010, in the Matter of
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation., The United
States District Court for the Eastern District of New York.
Second Supplemental Expert Report of Kevin M. Murphy, July 6, 2010, in the Matter of
Insignia Systems, Inc. v. News America Marketing In-Store, Inc., The United States
District Court for the District of Minnesota.
Deposition of Kevin M. Murphy, July 8, 2010, in the Matter of Insignia Systems, Inc. v.
News America Marketing In-Store, Inc., The United States District Court for the District
of Minnesota.
Expert Report of Kevin M. Murphy, July 28, 2010, in the Matter of Commonwealth of
Pennsylvania by Thomas W. Corbett, Jr., in his capacity as Attorney General of the
Commonwealth of Pennsylvania v. TAP Pharmaceutical Products, Inc., et al., in the
Commonwealth Court of Pennsylvania, No. 212 MD 2004.
Response of Kevin M. Murphy to Reply Report of Mark Israel and Michael Katz, August
19, 2010, in the Matter of Applications of Comcast Corporation, General Electric
Company and NBC Universal, Inc., for Consent to Assign Licenses or Transfer Control
of Licensees., Federal Communications Commission.
Expert Report of Kevin M. Murphy, September 14, 2010, in the Matter of City of St.
Louis, et al. v. American Tobacco Co., et al., The Circuit Court of the City of St. Louis
State of Missouri.
Deposition of Kevin M. Murphy, September 24, 2010, in the Matter of City of St. Louis,
et al. v. American Tobacco Co., et al., The Circuit Court of the City of St. Louis State of
Missouri.
Supplemental Expert Report of Kevin M. Murphy, September 30, 2010, in the Matter of
Commonwealth of Pennsylvania by Thomas W. Corbett, Jr., in his capacity as Attorney
General of the Commonwealth of Pennsylvania v. TAP Pharmaceutical Products, Inc., et
al., in the Commonwealth Court of Pennsylvania, No. 212 MD 2004.
Expert Report of Kevin M. Murphy, October 1, 2010, in the Matter of State of New
Hampshire v. Hess Corporation, et al., The State of New Hampshire Superior Court.
Expert Report of Kevin M. Murphy, October 4, 2010, in the Matter of the Arbitration
between Cordis Corporation and Abbott Vascular., CPR International Institute for
Conflict Prevention & Resolution.

- 14 -

Deposition of Kevin M. Murphy, October 7, 2010, in the Matter of the Arbitration
between Cordis Corporation and Abbott Vascular., CPR International Institute for
Conflict Prevention & Resolution.
Trial Testimony of Kevin M. Murphy, November 8, 2010, in the Matter of the
Arbitration between Cordis Corporation and Abbott Vascular., CPR International
Institute for Conflict Prevention & Resolution.
Declaration of Kevin M. Murphy, November 12, 2010, in the Matter of RWJ
Management Company, Inc. v. BP Products North America, Inc., The United States
District Court for the Northern District of Illinois Eastern Division.
Expert Report of Kevin M. Murphy, November 15, 2010, in the Matter of RWJ
Management Company, Inc. v. BP Products North America, Inc., The United States
District Court for the Northern District of Illinois Eastern Division.
Expert Report of Kevin M. Murphy, November 19, 2010, in the Matter of Craft, et al., v.
Philip Morris Companies, Inc., a corporation, and Philip Morris Incorporated, a
corporation, Missouri Circuit Court, Twenty-Second Judicial District (City of St. Louis),
Case No. 002-00406-02.
Economic Analysis of Kevin M. Murphy to Guide Interpretation of Provisions of the
Dodd-Frank Act Regarding Regulation of Debit Interchange Fees, November 23, 2010,
submission on behalf of Bank of America Corporation.
Comments of Kevin M. Murphy on the November 10, 2010 Report of Drs. Mark Israel
and Michael L. Katz, November 24, 2010, in the Matter of Applications of Comcast
Corporation, General Electric Company and NBC Universal, Inc., for Consent to Assign
Licenses or Transfer Control of Licensees., Federal Communications Commission.
Expert Report of Kevin M. Murphy, November 29, 2010, in the Matter of Reggie White,
et al., v. NFL: Lockout Insurance & Lockout Loans., The United States District Court
District of Minnesota.
Deposition of Kevin M. Murphy, December 3, 2010, in the Matter of Reggie White, et
al., v. NFL: Lockout Insurance & Lockout Loans., The United States District Court
District of Minnesota.
Deposition of Kevin M. Murphy, December 13, 2010, in the Matter of RWJ Management
Company, Inc. v. BP Products North America, Inc., The United States District Court for
the Northern District of Illinois Eastern Division.
Deposition of Kevin M. Murphy, January 17-18, 2011, in the Matter of Craft, et al., v.
Philip Morris Companies, Inc., a corporation, and Philip Morris Incorporated, a
corporation, Missouri Circuit Court, Twenty-Second Judicial District (City of St. Louis),
Case No. 002-00406-02.

- 15 -

Report of Kevin M. Murphy, February 15, 2011, submitted by TCF Financial
Corporation on February 16, 2011 to the Subcommittee on Financial Institutions and
Consumer Credit of the Committee on Financial Services of the U.S. House of
Representatives.
Declaration of Kevin M. Murphy, March 2, 2011, in the Matter of TCF National Bank v.
Ben S. Bernanke, Janet L. Yellen, Kevin M. Warsh, Elizabeth A. Duke, Daniel K. Tarullo
and Sarah Bloom Raskin, the Board of Governors of the Federal Reserve System, in their
official capacities; and John Walsh, Comptroller of the Currency, in his official capacity.
Expert Report of Kevin M. Murphy, April 11, 2011, in the Matter of Datel Holdings,
LTD., and Datel Design & Development, Inc., v. Microsoft Corporation., The United
States District Court Northern District of California.
Declaration of Kevin M. Murphy, May 26, 2011, filed with the National Labor Relations
Board on behalf of the National Basketball Players Association.
Deposition of Kevin M. Murphy, June 14, 2011, in the Matter of Datel Holdings, LTD.,
and Datel Design & Development, Inc., v. Microsoft Corporation., The United States
District Court Northern District of California.
Expert Report of Kevin M. Murphy, July 1, 2011, in the Matter of Certain Gaming and
Entertainment Consoles, Related Software, and Components Thereof., The United States
International Trade Commission.
Expert Report of Kevin M. Murphy, August 17, 2011, in the Matter of American
Airlines, Inc. v. Sabre Inc., et al., The Judicial District of Tarrant County, Texas 67th
Judicial District.
Expert Report of Kevin M. Murphy, August 19, 2011, in the Matter of Motor Fuel
Temperature Sales Litigation, The United States District Court for the District of Kansas.
Deposition of Kevin M. Murphy, September 6, 2011, in the Matter of Certain Gaming
and Entertainment Consoles, Related Software, and Components Thereof., The United
States International Trade Commission.
Expert Report of Kevin M. Murphy, September 9, 2011, in the Matter of State of New
York v. Intel Corporation, The United States District Court for the District of Delaware.
Deposition of Kevin M. Murphy, September 14, 2011, in the Matter of Motor Fuel
Temperature Sales Litigation, The United States District Court for the District of Kansas.
Direct Testimony of Kevin M. Murphy, September 27, 2011, in the Matter of Certain
Gaming and Entertainment Consoles, Related Software, and Components Thereof., The
United States International Trade Commission.

- 16 -

Deposition of Kevin M. Murphy, October 8-10, 2011, in the Matter of State of New
York v. Intel Corporation, The United States District Court for the District of Delaware.
Report of Kevin M. Murphy, October 10, 2011, in connection with dispute between
NRLC and railroad employees, National Mediation Board Case Nos. A-13569; A-13570;
A-13572; A-13573; A-13574; A-13575; A-13592, before Emergency Board No. 243.
Hearing Testimony of Kevin M. Murphy, October 13, 2011, in connection with dispute
between NRLC and railroad employees, National Mediation Board Case Nos. A-13569;
A-13570; A-13572; A-13573; A-13574; A-13575; A-13592, before Emergency Board No.
243.
Expert Report of Kevin M. Murphy, October 17, 2011, in the Matter of State of New
Hampshire v. Hess Corporation, et al., The State of New Hampshire Superior Court.
Declaration of Kevin M. Murphy, December 1, 2011, the Matter of Motor Fuel
Temperature Sales Litigation, The United States District Court for the District of Kansas.
Expert Report of Kevin M. Murphy, December 5, 2011, in the Matter of Retractable
Technologies, Inc. and Thomas Shaw v. Becton, Dickinson and Company, The United
States District Court for the Eastern District of Texas Marshall Division.
Trial Testimony of Kevin M. Murphy, December 7-8, 2011, in the Matter of Novell,
Incorporated v. Microsoft Corporation., The United States District Court Northern
District of Maryland.
Trial Testimony of Kevin M. Murphy, December 29, 2011, in the Matter of RWJ
Management Company, Inc. v. BP Products North America, Inc., The United States
District Court for the Northern District of Illinois Eastern Division.
Supplemental Expert Report of Kevin M. Murphy, January 15, 2012, in the Matter of
Retractable Technologies, Inc. and Thomas Shaw v. Becton, Dickinson and Company,
The United States District Court for the Eastern District of Texas Marshall Division.
Trial Testimony of Kevin M. Murphy, January 18, 2012, in the Matter of Certain Gaming
and Entertainment Consoles, Related Software, and Components Thereof., The United
States International Trade Commission.
Supplemental Expert Report of Kevin M. Murphy, February 23, 2012, in the Matter of
State of New Hampshire v. Hess Corporation, et al., The State of New Hampshire
Superior Court.
Affidavit of Kevin M. Murphy, March 12, 2012, in the Matter of Sharon Price and
Michael Fruth, Individually and on Behalf of Others Similarly Situated vs. Philip Morris
Incorporated, The United States Circuit Court, Third Judicial Court, Madison County,
Illinois.

- 17 -

Declaration of Kevin M. Murphy, May 3, 2012, in the Matter of Retractable
Technologies, Inc. and Thomas Shaw v. Becton, Dickinson and Company, The United
States District Court for the Eastern District of Texas Marshall Division.
Comments of Kevin M. Murphy of DirecTV, LLC, June 22, 2012, in the Matter of
Revision of the Commission’s Program Access Rules; News Corporation and the
DIRECTV Group, Inc., Transferors, and Liberty Media Corporation, Transferee, for
Authority to Transfer Control; Applications for Consent to the Assignment and/or
Transfer of Control of Licenses, Adelphia Communications Corporation (and
Subsidiaries, Debtors-in-Possession), Assignors, to Time Warner Cable, Inc.
(Subsidiaries), Assignees, et al., Federal Communications Commission.
Expert Report of Kevin M. Murphy, July 20, 2012, in the Matter of American Airlines v.
Sabre, Inc., Sabre Holdings Corp., and Sabre Travel International Ltd., The United States
Judicial District Tarrant County, Texas 67th Judicial District.
Declaration of Kevin M. Murphy, July 21, 2012, in the Matter of Kirk Dahl v. Bain
Capital Partners, LLC., The United States District Court District of Massachusetts.
Expert Report of Kevin M. Murphy, July 23, 2012, in the Matter of Kirk Dahl v. Bain
Capital Partners, LLC., The United States District Court District of Massachusetts.
Expert Report of Kevin M. Murphy, July 24, 2012, in the Matter of Microsoft
Corporation v. Motorola, Inc., The United States District Court Western District of
Washington at Seattle.
Deposition of Kevin M. Murphy, August 22, 2012, in the Matter of Microsoft
Corporation v. Motorola, Inc., The United States District Court Western District of
Washington at Seattle.
“Economic Analysis of the Impact on DIRECTV’s Subscribership of Carrying an RSN:
Evidence from San Diego,” August 31, 2012, submitted in the Matter of Revision of the
Commission’s Program Access Rules; News Corporation and the DIRECTV Group,
Inc., Transferors, and Liberty Media Corporation, Transferee, for Authority to Transfer
Control; Applications for Consent to the Assignment and/or Transfer of Control of
Licenses, Adelphia Communications Corporation (and Subsidiaries, Debtors-inPossession), Assignors, to Time Warner Cable, Inc. (Subsidiaries), Assignees, et al.,
Federal Communications Commission.)
Expert Report of Kevin M. Murphy, September 7, 2102, in the Matter of Willard R.
Brown, et al. v. The American Tobacco Co., Inc., et al., Superior Court for the State of
California for the County of San Diego.
Deposition of Kevin M. Murphy, September 14, 2012, in the Matter of Willard R. Brown,
et al. v. The American Tobacco Co., Inc., et al., Superior Court for the State of California
for the County of San Diego.

- 18 -

Deposition of Kevin M. Murphy, September 24, 2012, in the Matter of American Airlines
Inc. v Sabre, Inc., Sabre Holdings Corp., and Sabre Travel International Ltd. for the
State of Texas for the Judicial District of Tarrant County.
Expert Report of Kevin M. Murphy, October 10, 2012, in the Matter of Avery Dennison
Corporation v. 3M Innovative Properties and 3M Company, The United States District
Court for the District of Minnesota.
Expert Report of Kevin M. Murphy, November 12, 2012, in the Matter of Re High-Tech
Employee Antitrust Litigation, The United States District Court Northern District of
California San Jose Division.
Trial Testimony of Kevin M. Murphy, November 13, 2012, in the Matter of Microsoft
Corporation v. Motorola Inc, The United States District Court Western District of
Washington at Seattle.
Expert Report of Kevin M. Murphy, November 15, 2012, in the Matter of New Jersey
Dep’t of Envtl. Prot., et al. v. Atlantic Richfield Co., et al., The United States District
Court Southern District of New York.
Deposition of Kevin M. Murphy, December 3, 2012, in the Matter of Re High-Tech
Employee Antitrust Litigation, The United States District Court Northern District of
California San Jose Division
Expert Report of Kevin M. Murphy, December 21, 2012, in re: Titanium Dioxide
Antitrust Litigation, The United States District Court for the District of Maryland.
Deposition of Kevin Murphy, January 16, 2013, in the Matter of Avery Dennison
Corporation v. 3M Innovative Properties and 3M Company, The United States District
Court for the District of Minnesota.
Amended Expert Report of Kevin M. Murphy, February 8, 2013, in the Matter of New
Jersey Dep’t of Envtl. Prot., et al. v. Atlantic Richfield Co., et al, The United States
District Court Southern District of New York.
Expert Report of Professor Kevin M. Murphy, February 8, 2013, in United States of
America v. Apple Inc., et al., The United States District Court Southern District of New
York.
Declaration of Kevin M. Murphy, February 22, 2013, in the Matter of Willard R. Brown,
et al. v. The American Tobacco Co., Inc., et al., Superior Court for the State of California
for the County of San Diego.
Rebuttal Expert Report of Kevin M. Murphy, March 1, 2013, in United States of America
v. Apple Inc., et al., The United States District Court Southern District of New York.

- 19 -

Second Supplemental Expert Report of Kevin M. Murphy, March 8, 2013, in the Matter
of Retractable Technologies, Inc. and Thomas Shaw v. Becton, Dickinson and Company,
The United States District Court for the Eastern District of Texas Marshall Division.
Direct Testimony of Kevin M. Murphy, April 26, 2013, in United States of America v.
Apple Inc., et al., The United States District Court Southern District of New York
(revised and resubmitted on May 29, 2013).
Declaration of Kevin M. Murphy, May 13, 2013, in the Matter of Brenda Blakeman v
National Milk Producers Federation, et al., The United States District Court for the
Southern District of Illinois.
Expert Report of Kevin M. Murphy, May 29, 2013, in the Matter of Microsoft
Corporation v. Motorola, Inc., et al., The United States District Court Western District of
Washington at Seattle.
Declaration of Kevin M. Murphy, June 6, 2013, in the Matter of WNET, Thirteen, Fox
Television Stations, Inc.; Twentieth Century Fox Film Corporation, WPIX, Inc.,
Univision Television Group, Inc.; The Univision Network Limited Partnership, and
Public Broadcasting Service v. Aereo, Inc. f/k/a Bamboom Labs, Inc., in The United
States District Court for the Southern District of New York.
Expert Report of Kevin M. Murphy, June 7, 2013, in the Matter of Patrick Brady, et al.,
v. Airline Pilots Association, International, The United States District Court District of
New Jersey.
Rebuttal Expert Report of Kevin M. Murphy, June 10, 2013, in the Matter of Microsoft
Corporation v. Motorola, Inc., et al., The United States District Court Western District of
Washington at Seattle.
Trial Testimony of Kevin M. Murphy, June 19, 2013, in United States of America v.
Apple Inc., et al., The United States District Court Southern District of New York.
Supplemental Expert Report of Kevin M. Murphy, June 21, 2013, Re High-Tech
Employee Antitrust Litigation, The United States District Court Northern District of
California San Jose Division.
Trial Testimony of Kevin M. Murphy, July 1, 2013 and July 2, 2013, in re: Tobacco Cases
II, Willard R. Brown, et al., v. The American Tobacco Company, et al., in The Superior
Court of the State of California in and for The County of San Diego Central Division.
Expert Report of Kevin M. Murphy, July 3, 2013, in re: Text Messaging Antitrust
Litigation, in The United States District Court For the Northern District of Illinois
Eastern Division.

- 20 -

Video Deposition of Kevin M. Murphy, July 5, 2013, in re: High-Tech Employee
Antitrust Litigation, in United States District Court Northern District of California San
Jose Division.
Expert Report of Kevin M. Murphy, July 19, 2013, in The Apple iPod iTunes Antitrust
Litigation, in The United States District Court For the Northern District of California
Oakland Division.
Trial Testimony of Kevin M. Murphy, August 29, 2013 and August 30, 2013, in the
Matter of Microsoft Corporation v. Motorola, Inc., et al., The United States District
Court Western District of Washington at Seattle.
Trial Testimony of Kevin M. Murphy, September 17, 2013, in the Matter of Retractable
Technologies, Inc. and Thomas Shaw v. Becton, Dickinson and Company, The United
States District Court for the Eastern District of Texas Marshall Division.
Deposition of Kevin M. Murphy, September 26, 2013, in re: Text Messaging Antitrust
Litigation, in The United States District Court For the Northern District of Illinois
Eastern Division
Expert Report of Kevin M. Murphy, September 27, 2013, in re: Petition of Pandora
Media, Inc., related to United States of America v. American Society of Composers
Authors and Publishers, in The United States District Court for the Southern District of
New York.
Rebuttal Expert Report of Kevin M. Murphy, October 21, 2013, in re: Petition of
Pandora Media, Inc., related to United States of America v. American Society of
Composers Authors and Publishers, in The United States District Court for the Southern
District of New York.
Expert Report of Kevin M. Murphy, October 21, 2013, in the Matter of Mary A. Carroll
and Betty C. Lynn, et al., v. Philip Morris USA, Inc., et al., Superior Court for the State of
Delaware in and for New Castle County.
Deposition of Kevin M. Murphy, November 2, 2013, in re: Petition of Pandora Media,
Inc., related to United States of America v. American Society of Composers Authors and
Publishers, in The United States District Court for the Southern District of New York.
Rebuttal Expert Report of Kevin M. Murphy, November 8, 2013, in the Matter of US
Airways, Inc. v. Sabre Holdings Corp., Sabre, Inc., and Sabre Travel International Ltd., in
The United States District Court for the Southern District of New York.
Deposition of Kevin M. Murphy, November 12, 2013, in The Apple iPod iTunes
Antitrust Litigation, in The United States District Court for the Northern District of
California Oakland Division.

- 21 -

Expert Report of Kevin M. Murphy, November 18, 2013, in the Matter of WNET,
Thirteen, Fox Television Stations, Inc.; Twentieth Century Fox Film Corporation, WPIX,
Inc., Univision Television Group, Inc., The Univision Network Limited Partnership, and
Public Broadcasting Service v. Aereo, Inc. f/k/a Bamboom Labs, Inc., in The United
States District Court for the Southern District of New York.
Direct Testimony of Kevin M. Murphy, November 18, 2013, in re: Petition of Pandora
Media, Inc., related to United States of America v. American Society of Composers
Authors and Publishers, in The United States District Court for the Southern District of
New York.
Expert Report of Kevin M. Murphy, November 25, 2013, in the Matter of Re High-Tech
Employee Antitrust Litigation, in The United States District Court for the Northern
District of California San Jose Division.
Deposition of Kevin M. Murphy, December 7, 2013, in the Matter of Re High-Tech
Employee Antitrust Litigation, in The United States District Court for the Northern
District of California San Jose Division.

- 22 -

Appendix B

Robert H. Topel
CURRICULUM VITAE
December, 2013
CURRENT POSITIONS
Isidore Brown and Gladys J. Brown Distinguished Service Professor of Economics,
Booth School of Business, University of Chicago
Director, George J. Stigler Center for the Study of the Economy and the State
Co-Director, Energy Policy Institute at Chicago (EPIC)
Research Associate, National Bureau of Economic Research
EDUCATION
B.A. (with High Honors), University of California, Santa Barbara, 1974
Ph.D., University of California, Los Angeles, 1980
FIELDS OF SPECIALIZATION
Microeconomics, Labor Economics, Industrial Organization, Health Economics,
Economic Policy, Energy Economics, National Security Economics
PREVIOUS ACADEMIC POSITIONS
Professor of Economics, Graduate School of Business, University of Chicago, 1986-93
Kirby Distinguished Visiting Professor of Economics, Texas A&M University, 2006
Professor of Economics, Department of Economics, University of California, Los
Angeles, 1986
Associate Professor of Economics, Department of Economics, University of California,
Los Angeles, 1985-86
Associate Professor of Economics, Graduate School of Business, University of Chicago,
1983-85
Assistant Professor of Economics, Department of Economics, University of Chicago,
1980-83
OTHER AFFILIATIONS
Research Associate, National Bureau of Economic Research, 1984—present
Senior Fellow, the Milken Institute, 1999—present
Faculty Member, MacLean Center for Clinical Medical Ethics, University of Chicago
Member, National Petroleum Council Taskforce on Transportation Fuels Supply and
Infrastructure, 2010-2012
Fellow, Center for the Study of Poverty and Inequality, Stanford University, 2006-present
Member, Brookings Panel on Economic Activity, various years.

Visiting Scholar, Board of Governors of the Federal Reserve, 1990
Research Associate, Economics Research Center, NORC, 1980—1990
Consulting Economist, The Rand Corporation, 1982—1989
Research Associate, Center for the Study of the Economy and the State, 1980—present
Faculty Research Fellow, National Bureau of Economic Research, 1981-83
Research Economist, Unicon Corporation, 1981-88
Consultant, U.S. Department of Labor, 1985-90
Partner, Chicago Partners LLC 1994-2008
Principal & Managing Director, Navigant Economics, 2008-2013
Board of Directors, Ingalls Hospitals and Ingalls Health Service, 2000-2012
Director, WGA Evans Scholars Foundation, 2011-present
Senior Consultant, Charles River Associates, 2013-present

EDITORIAL POSITIONS
Editor, Journal of Political Economy, 1993-2003
Board of Editors, American Economic Review, 1992-94
Associate Editor, Journal of Labor Economics, 1982-92
Editorial Board, International Journal of the Economics of Business, 1993-present
Member of the Advisory Board, ERN Labor Journals, 1998-present
HONORS & AWARDS
Kenneth J. Arrow Award, International Health Economics Association, 2007
Kirby Distinguished Visiting Professor, Texas A&M University, 2006
Research America Eugene Garfield Prize for Medical and Health Research, 2005
Elected Fellow, Society of Labor Economists, 2004
Elected Member, Conference on Research in Income and Wealth
Elected Founding Member, National Academy of Social Insurance
William Ladany Research Scholar, University of Chicago, 1989-91
William Fishman Research Scholar, University of Chicago, 1986-87
Smith Richardson Dissertation Fellowship in Political Economy, 1978-79
Foundation for Research in Economics and Education Fellowships, 1975-79
Chancellor’s Intern Fellow, University of California, Los Angeles, 1975-79
University Fellow, Northwestern University, 1975
General Electric Dissertation Fellowship, 1978
TEACHING EXPERIENCE
Graduate Economic Theory I, II, III
Law, Economics and Business
Competitive Strategy
Advanced Topics in Labor Economics
Advanced Topics in Microeconomics
Managing the Workplace
Industrial Organization/Antitrust
Price Theory

OTHER PROFESSIONAL ACTIVITIES
Thompson Lecture (Keynote Address), Midwest Economic Association, 2000
Nominating Committee, American Economic Association, 1996, 1997
Program Committee, American Economic Association, 2006-2007.
Organizer, Universities-NBER Research Conference: “Labor Markets in the 1990s,”
Cambridge, December 1989.
Program Chair, Labor Economics, Econometric Society Meetings, December 1989.
National Science Foundation Review Panel in Economics, 1998, 1999
Inaugural Keynote Lecture, Missouri Economics Conference, University of Missouri,
2001
Pihl Lecturer, Wayne State University, November, 2004
Keynote Address, Federal Reserve Bank of Cleveland Conference on Education and
Economic Development, November, 2004
Kirby Lecturer, Texas A&M University, 2006
Huggins Lecturer, Department of Surgery Huggins Conference, University of Chicago,
May, 2007
Keynote Address, Conference Board of Canada Conference on Medical Research,
Montreal, January 2009
Keynote Address, Council on Competitiveness Conference on Energy Policy, Argonne
National Laboratory, May 2009
Keynote Address, University of Chicago/RFF/University of Illinois Conference on
Energy Policy and the Economy, Washington, D.C., January 2010
Keynote Address, Humana Health Economics Forum, Santa Fe Institute, 2011
Keynote Address, Toyota Sustainability Conference, La Jolla, 2011
Keynote Address, Conference on Health Policy, Arizona State University, 2013
UNIVERSITY SERVICE
Director, Undergraduate Program in Economics, 1980-83
Chairman, Graduate School of Business Curriculum Review, 1990-91
Committee on Graduate Education, 1992-94
Committee on Undergraduate Education, 1993-94
Council of the University Senate, 1992-94, 1995-97, 1999-2002, 2004-2007, 2010Committee of the Council of the University Senate, 2000-2002, 2006-2007
Graduate School of Business Policy Committee, 1995-97, 1999-2001
Member, Presidential Search Committee, 1999-2000
Board of Directors, University of Chicago Laboratory Schools, 1986-92, 1998-2007
Chairman, Director Search Committee, U of C Laboratory Schools, 2002-2003
Area Coordinator, PhD Program in Economics, 2002-2008
Director, George J. Stigler Center, 2007-present
Director, University of Chicago Energy Initiative, 2008-2010
Co-Director, Energy Policy Institute at Chicago, 2010-present

BIBLIOGRAPHY
Books:
The Welfare State in Transition, with Richard Freeman and Birgitta Swedenborg.
Chicago: University of Chicago Press for NBER, 1997.
Labor Market Data and Measurement, with John Haltiwanger and Marilyn Manser.
Chicago: University of Chicago Press for NBER, 1998.
Välfärdsstat i omvandling: Amerikanskt Perspectiv pä den Svenska Modelten, with
Richard Freeman and Birgitta Swedenborg. Författarna och SNS Förlag, 1995.
Measuring the Gains from Medical Research: An Economic Approach, with Kevin M.
Murphy. Chicago: University of Chicago Press (2003).
Reforming the Welfare State: Recovery and Beyond in Sweden, with Richard Freeman
and Birgitta Swedenborg, Chicago, University of Chicago Press for NBER, 2009
Att Reformera Välfärdsstaten, with Richard Freeman and Birgitta Swedenborg, SNS
Förlag, Stockholm, 2006
Distributional Aspects of Energy and Climate Policy, ed. with Mark Cohen and Don
Fullerton, Special Issue of the BE Journal of Economic Analysis and Policy, Spring 2011.
Also, Edward Elgar Publishing, Surrey, UK, 2013.
Articles and Monographs:
“Layoffs, Inventories, and the Demand for Labor,” Ph.D. Dissertation, University of
California, Los Angeles, December 1980.
“Unemployment Insurance: Survey and Extensions,” Economica 47 (August 1980): 35179 (with F. Welch)
“Inventory Adjustments, Industry Behavior, and the Business Cycle,” presented at the
NBER Conference on Inventories and Business Cycles, March 1980 (with A. Stockman)
“Inventories, Layoffs, and the Short-Run Demand for Labor,” American Economic
Review (September 1982): 769-87.
“Experience Rating of Unemployment Insurance and the Incidence of Unemployment,”
Journal of Law and Economics (April 1984): 61-90.
“On Layoffs and Unemployment Insurance,” American Economic Review (September
1983): 541-59.
“Equilibrium Earnings, Turnover, and Unemployment: New Evidence,” Journal of Labor
Economics (October 1984): 500-22.

“Local Labor Markets,” Presented at Hoover Institution Conference on Labor Markets,
January 1983. Journal of Political Economy 94 (June 1986, part 2): 111-43.
“Estimation and Inference in ‘Two-Step’ Econometric Models,” (with K. M. Murphy)
Journal of Business and Economic Statistics 3 (October 1985): 370-80.
“Employment Risk, Sectoral Shifts, and Unemployment,” (with G. Neumann), in Studies
in Search, ed. N. M. Kiefer and G. R. Neumann. Oxford: Oxford University Press, 1989.
“Unemployment and Unemployment Insurance,” Research in Labor Economics 7 (1985):
91-135.
“Efficient Labor Contracts with Employment Risk,” (with F. Welch), Rand Journal of
Economics 17 (Winter 1986): 490-507.
“Financing Unemployment Insurance: History, Incentives, and Reform,” in
Unemployment Insurance: The Second Half Century, ed. W. Lee Hansen and J. Byers.
University of Wisconsin Press, 1990.
“Sectoral Uncertainty and Unemployment,” UCLA Department of Economics Working
Paper No. 384, September 1985 (with L. Weiss), in Employment, Unemployment, and
Labor Utilization, ed. R. A. Hart. Boston: Allen & Unwin, 1988.
“The Housing Market in the United States” (with S. Rosen), Journal of Political
Economy (August 1988): 718-40.
“What They Say or What They Do? The Use of Survey Data in Predicting Behavior”
(with K. M. Murphy), Graduate School of Business, University of Chicago, March 1985.
“Unemployment, Risk and Earnings: Theory and Evidence from a Model of Equalizing
Wage Differentials” (with K. M. Murphy), in Unemployment and the Structure of Labor
Markets, ed. J. Leonard and K. Lang. London: Basil Blackwell, 1986, pp. 103-140.
“Job Mobility, Search, and Earnings Growth: A Reinterpretation of Human Capital
Earnings Functions,” Research in Labor Economics 8 (1986): 199-233. Reprinted in
Research in Labor Economics 35th Anniversary Retrospective, 2012, 401-435.
“The Evolution of Unemployment in the United States: 1968-1985” (with K. M.
Murphy), The NBER Macroeconomics Annual, vol. 2, 1987, pp. 7-58.
“The Impact of Immigration on the Labor Market,” in Immigration, Trade, and the Labor
Market, ed. R. Freeman. University of Chicago Press for NBER, 1988.
“Efficiency Wages Reconsidered: Theory and Evidence” (with K. M. Murphy), in
Advances in the Theory and Measurement of Unemployment, pp. 204-40. Edited by
Yoram Weiss and Gideon Fishelson. London: Macmillan, 1990.

“Labor Market Adjustments to Increased Immigration,” (with R. LaLonde), in
Immigration, Trade, and the Labor Market, ed. R. Freeman. University of Chicago Press
for NBER, 1989.
“Job Mobility and the Careers of Young Men” (with M. P. Ward), Quarterly Journal of
Economics 107 (May 1992): 441-79.
“Employment Risk, Diversification, and Unemployment,” (with George Neumann)
Quarterly Journal of Economics (November 1991): 1341-1365.
“Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority,” Journal of
Political Economy 99 (February 1991): 145-76. Reprinted in Outstanding Contributions
in Labor Economics, ed. Orley Ashenfelter, Worth Publishers, 1999: 162-192.
“Specific Capital and Unemployment: Measuring the Costs and Consequences of Worker
Displacement.” Carnegie-Rochester Series on Public Policy 33 (1990): 181-214.
“The Assimilation of Immigrants in the United States: Immigrant Quality and the
Changing Price of Skills,” In Immigration and the Work Force: Economic Consequences
for the United States and Source Areas, ed. G. Borjas and R. Freeman. Chicago:
University of Chicago Press for NBER, 1992.
“Trends in the American Labor Market,” GSB Chicago, vol. 12, no. 2, Winter 1990, pp.
11-16.
“Why Has the Natural Rate of Unemployment Increased over Time?” (with K. Murphy
and C. Juhn), Brookings Papers on Economic Activity 2 (1991), pp. 75-142.
“Immigrant Quality and Assimilation in the American Labor Market” (with R. LaLonde),
American Economic Review, 81 ( May 1991): 297-302.
“Unemployment and Insurance,” in Proceedings of National Academy of Social
Insurance, 1992.
“Labor Markets and Economic Growth: Lessons from Korea’s Industrialization, 19701990” (with D. Kim), Differences and Changes in Wage Structures, ed. Richard Freeman
and Larry Katz (Chicago: University of Chicago Press for NBER, 1995.
“Wage Inequality and Regional Labor Market Performance in the United States,” Labour
Market and Economic Performance: Europe, Japan, and the USA, ed. Toshiaki
Tachibanaki (New York: St. Martin’s Press, 1994).
“Discretion and Bias in Performance Evaluation” (with C. Prendergast), European
Economic Review 36 (June 1993): 355-65.
“What Have We Learned from Empirical Studies of Unemployment and Turnover?”
American Economic Review, 83 (May 1993): 110-115.

“Regional Labor Markets and the Determinants of Wage Inequality,” American
Economic Review, 84 (May 1994): 17-22.
“Ekonomiska problem i Sveriges välfärdsstat -- inledning, sammanfattning och
slutsatser,” with Richard B. Freeman and Birgitta Swedenborg. In Välfärdsstat i
omvandling: Amerikanskt Perspectiv pä den Svenska Modelten, with Richard Freeman
and Birgitta Swedenborg. Författarna och SNS Förlag, 1995.
“Lönepolitik och strukturomvandling,” with Per-Anders Edin. In Välfärdsstat i
omvandling: Amerikanskt Perspectiv pä den Svenska Modelten, with Richard Freeman
and Birgitta Swedenborg. Författarna och SNS Förlag, 1995.
“Favoritism in Organizations” (with C. Prendergast), Journal of Political Economy 104
(October 1996): 958-78.
“In Celebration of Armen Alchian’s 80th Birthday: Living and Breathing Economics”,
(with Armen A. Alchian, James M. Buchanan, Harold Demsetz, Axel Leijonhufvud, John
R. Lott, Jr., and William F. Sharpe), Economic Inquiry, Vol. XXXIV, July 1996, 412426.
“Another Look at Look Labor Market Adjustments to Increased Immigration” (with J.
Hojvat-Gallin and R. LaLonde), 1996.
“Economic Impact of International Migration and the Economic Performance of
Migrants,” (with R. LaLonde), in Handbook of Population and Family Economics, ed.
Mark R. Rosenzweig and Oded Stark (Amsterdam: North-Holland, 1997), pp. 799-850.
“Economic Troubles in Sweden's Welfare State,” in The Welfare State in Transition, ed.
Richard Freeman, Robert Topel, and Birgitta Swedenborg. Chicago: University of
Chicago Press for NBER, 1997.
“Wage Policy and Restructuring: The Swedish Labor Market Since 1960” (with PerAnders Edin), in The Welfare State in Transition, ed. Richard Freeman, Robert Topel,
and Birgitta Swedenborg. Chicago: University of Chicago Press for NBER, 1997.
“Unemployment and Nonemployment” (with Kevin M. Murphy), American Economic
Review 87 (May 1997): 295-300.
“Factor Proportions and Relative Wages: The Supply Side Determinants of Wage
Inequality,” Journal of Economic Perspectives 11 (Spring 1997): 55-74.
“Empirical Knowledge in Labor Economics,” in Labor Market Data and Measurement,
ed. John Haltiwanger, Marilyn Manser, and Robert Topel. Chicago: University of
Chicago Press for NBER, 1998.
“Labor Markets and Economic Growth,” in Handbook of Labor Economics, ed. Orley
Ashenfelter and David Card. Amsterdam: Elsevier Science B.V., 1999, pp. 2943-2984.

“Medical Research: What's It Worth?” (with K. M. Murphy), Milken Institute Review: A
Journal of Economic Policy (First Quarter 2000): 23-30.
“Entry, Product Design, and Pricing in an Initially Monopolized Market” (with S. Davis
and K. M. Murphy), University of Chicago GSB, September 2001, revised January, 2003.
Journal of Political Economy, vol. 112 no. 1, pt. 2, February, 2004, pp188-225.
“Adverse Price Effects of Entry in Markets with Few Firms” (with Steven J. Davis and
Kevin M. Murphy), Working Paper, University of Chicago, April 2001.
“The Economic Value of Medical Research” (with Kevin M. Murphy), in Measuring the
Gains from Medical Research: An Economic Approach, edited by Kevin M. Murphy and
Robert H. Topel. Chicago: University of Chicago Press, 2003, pp 41-73.
“Current Unemployment, Historically Contemplated” (with Kevin M. Murphy and
Chinhui Juhn), Brookings Papers on Economic Activity 1. Washington, D.C.: The
Brookings Institution, 2002.
“Estimation and Inference in Two-Step Econometric Models” (with K.M. Murphy),
Journal of Business and Economic Statistics, 20, issue 1, 2002: 88-97 (reprint: 20th
Anniversary issue of the most important contributions published in JBES).
“Labor Markets in the United States and Korea: Factor Proportions, Inequality, and
Unemployment” in Macroeconomic Implications of Post-Crisis Structural Change, L.J.
Cho, D. Cho and Y.H. Kim, KDI press, 2005, pp 131-60.
“Diminishing Returns? Evidence on the Costs and Benefits of Improving Health” (with
K.M. Murphy) November 2002, Perspectives in Biology and Medicine, volume 46, no. 3,
(Summer, 2003): pp108-128.
“War vs. Containment” (with S.J. Davis and K.M. Murphy), March 2003; presented at
NBER Conference on National Security Economics, November 2003.
“Black-White Differences in the Economic Value of Improving Health” (with K. M.
Murphy). Presented at the National Institutes of Health Conference on Racial Disparities
in Health Outcomes, December 2001. Perspectives in Biology and Medicine, Summer,
2004.
“The Value of Health and Longevity” (with K.M. Murphy), Revised March, 2005, NBER
Working Paper #11405, June 2005. Journal of Political Economy, October 2006, pp
871-904. Winner of the 2005 Eugene Garfield Economic Impact of Medical Research
Award, given by Research America. Winner of the 2007 Kenneth J. Arrow Award, given
by the International Health Economics Association for the best paper in health economics
published in 2006.
“The Private and Social Benefits of Education”, (with Fabian Lange), Handbook of the
Economics of Education, North-Holland, 2006

“The Social Value of Education”, Keynote Address, Federal Reserve Bank of Cleveland
Conference on Education and Economic Development, November 2004, in Education and
Economic Development, Federal Reserve Bank of Cleveland Economic Review, 2004, pp
47-58.
“On Human Capital and Economic Growth” (with Fabian Lange), Working Paper,
University of Chicago, September, 2005.
“Äterhämtning och terstaende problem I den svenska valfardsstaten—inlendning,
sammanfattning och slutsatser” in Att Reformera Välfärdsstaten, with Richard Freeman
and Birgitta Swedenborg, SNS Förlag, Stockholm, 2006, 9-34.
”Forandrade forutsattningar for svensk lonebildning” (with Peter Fredriksson), in Att
Reformera Välfärdsstaten, with Richard Freeman and Birgitta Swedenborg, SNS Förlag,
Stockholm, 2006, 65-82.
”War in Iraq versus Containment” (with Steven J. Davis and Kevin M. Murphy), for
CESifo Conference “Guns and Butter: The Economic Causes and Consequences of
Conflict”, Munich, December 2005, February, 2006.
“Social Value and the Speed of Innovation” (with Kevin M. Murphy), American
Economic Review, May, 2007.
“Unemployment”, The New Palgrave of Economics, 2008
“Critical Loss Analysis in the Whole Foods Case”, Global Competition Policy, March,
2008, @ http://www.globalcompetitionpolicy.org/index.php?&id=949&action=907.
“Wage Determination and Employment in Sweden Since 1990”, (with Peter
Fredricksson), Working Paper, University of Chicago and Uppsala University, August,
2006, revised December, 2008, in Recovery and Beyond: Reforming the Welfare State in
Sweden, Richard Freeman, Birgitta Swedenborg and Robert Topel, eds., University of
Chicago Press for NBER, 2009
“Reforming the Welfare State: Recovery and Beyond in Sweden” (with Richard Freeman
and Birgitta Swedenborg), in Recovery and Beyond: Reforming the Welfare State in
Sweden, Richard Freeman, Birgitta Swedenborg and Robert Topel, eds., University of
Chicago Press for NBER, 2009
“On the Economics of Climate Policy”, (with Gary S. Becker and Kevin M. Murphy), BE
Journal of Economic Analysis and Policy, April, 2011
“Introduction to ‘Job Mobility Search and Earnings Growth, A Reinterpretation of
Human Capital Earnings Functions”, Research in Labor Economics 35th Anniversary
Retrospective, Emerald Group Publishing 2012, 397-400.
“Some Basic Economics of National Security” (with Kevin M. Murphy), American
Economic Review, May 2013

“Competitive Discounts and Antitrust Policy” (with Kevin. M. Murphy and Edward A.
Snyder), Oxford Handbook of Antitrust Economics, 2013 (forthcoming)

Selected Congressional Testimony and Presentations:
“Unemployment and Insurance,” Testimony before the U.S. Senate Committee on
Finance, April 23, 1991.
“The Economic Value of Medical Research,” Testimony before the U.S. Senate
Committee on Health, Education, Labor, and Pensions, May 10, 2001.
“The Value of Improvements in Health and Longevity”, Presentation for Congressional
Staff and the American Cancer Society, Washington, July, 2005.
Selected Reports:
“Unemployment Insurance Financing and Unemployment: Empirical Investigation of
Adverse Incentives,” Final Report, U.S. Department of Labor Contract No. B9M22046,
November 1982.
“Unemployment and Unemployment Insurance,” Final Report, U.S. Department of
Labor, ETA, May 1984.
“Local Labor Markets,” Final Report, U.S. Department of Labor, Office of the Assistant
Secretary for Policy, March 1984.
“The Use of Survey Data in Predicting Behavior: The Case of Enlistment Intentions,”
Final Report, U.S. Department of Defense, May 1985.
“Equalizing Wage Differences,” Final Report, U.S. Department of Labor, Office of the
Assistant Secretary for Policy, August 1985.
“Sectoral Change and Worker Displacement,” Final Report, U.S. Department of Labor,
Office of the Assistant Secretary for Policy, March 1990.
Book Reviews:
Employment Hazards by W. Kip Viscusi. In Journal of Economic Literature, March
1982.
Handbook of Labor Economics, ed. O. Ashenfelter and R. Layard. In Journal of
Economic Literature, 1988.

Selected Comments:
“Comment on ‘Some Recent Developments in Labor Economics and Their Implications
for Macroeconomics’,” Journal of Money, Credit and Banking 20 (August 1988, part 2).
“Comment on ‘Industry Rents: Evidence and Implications’,” (by Lawrence Summers and
Lawrence Katz) Brookings Papers on Economic Activity, Brookings Institution,
Washington, D.C., 1989.
“Comment on ‘Wage Dispersion between and within U.S. Manufacturing Plants’,
Brookings Papers on Economic Activity, 1991.
“Comment on ‘Why Is the U.S. Unemployment Rate So Much Lower?’” NBER
Macroeconomics Annual, 1998, pp. 67-72.
“Comment on ‘Does Immigration Grease the Wheels of the Labor Market?’” by George
J. Borjas. Brookings Papers on Economic Activity. edited by William C. Brainard and
George L. Perry. Washington, D.C. Brookings Institution, 2001.
“Comment on ‘Where did the Productivity Growth Go? Inflation Dynamics and the
Distribution of Income’” by Ian Dew-Becker and Robert J. Gordon. Brookings Papers on
Economic Activity. edited by William C. Brainard and George L. Perry. Washington,
D.C. Brookings Institution, 2005, 135-44.

Recent Cases, Reports and Testimony
Roderick Arnold et al. v. Cargill, Inc. in the U.S. District Court for the District
of Minnesota Third Division. No. 01-CV-2086 DWF/AJB. Expert on behalf of
Cargill in racial discrimination class action. Expert Report, June 29, 2004.
Applied Medical v. Ethicon, Inc., et. al. in the Central District of California.
No. SACV 03-1329. Expert on behalf of Johnson & Johnson (Ethicon) in antitrust
litigation. Expert Report, May 24, 2005. Deposition, November 7, 2005. Trial
Testimony, August 18, 2006.
Conmed Corp. v. Johnson & Johnson, United States District Court, Southern
District of New York 03-CV8800. Expert on behalf of Johnson and Johnson in
antitrust litigation. Expert Report, August 1, 2005.
Daryal T. Nelson, et. al. v. Wal-Mart Stores Inc. and Wal-Mart Transportation
LLC., Eastern District of Arkansas Helena Division, N). 2:05 CV-00134-WRW.
Expert on behalf of Wal-Mart in racial discrimination class action. Expert Report,
April 12, 2006. Deposition, May 2, 2006. Expert Report, July 28, 2008. Rebuttal
Expert Report, September 12, 2008. Deposition, September 23 2008. Declaration,
October 2, 2008.
Sulfuric Acid Antitrust Litigation, In the US District Court for the Northern
District of Illinois Eastern Division, No. 03-C-4576. Expert on behalf of
Marsulex and Chemtrade in antitrust class action. Expert Report, February 3,
2006. Deposition March 2006.
Amy Velez, et. al. v. Novartis Corporation, Novartis Pharmaceuticals
Corporation, and Thomas Ebeling, US District Court, Southern District of New
York, 04 Civ. 09194. Economic (compensation practices) expert on behalf of
Novartis Pharmaceuticals in class action gender discrimination case. Expert
Report, November 9, 2006.
Peter P. Jonites, et. al. v. Exelon Corporation, et. al., United States District
Court, Northern District of Illinois, No. 05CV04234. Expert on behalf of Exelon
in class action labor case. Expert Report, April 16, 2007, Amended Expert Report,
June 14, 2007.
Clifford L. Whitaker, et. al. v. 3M Company, United States District Court for
the Second Judicial District of Minnesota Civ.C4-04-012239. Expert on behalf
of 3M in class action discrimination case. Expert Report, July 25, 2007.
Deposition, August 21, 2007.

Pinkowski et al,. v. 3M Company, United States District Court, District of New
Jersey, No. 205CV05668. Expert on behalf of 3M in class action age discrimination
case. Expert Report January 29, 2007. Deposition, March 2007. Trial Testimony, May 8,
2010.
Sun Microsystems, Inc., et al. v. Hynix Semiconductor, Inc., et al. (Consolidated),
Unisys Corporation v. Hynix Semiconductor, Inc., et al., Jaco Electronics, Inc. v.
Hynix Semiconductor, Inc., et al., Edge Electronics, Inc. v. Hynix Semiconductor,
Inc., et al., All American Semiconductor, Inc., et al., v. Hynix Semiconductor, Inc. et
al., DRAM Claims Liquidation Trust, by its Trustee Wells Fargo Bank, NA v. Hynix
Semiconductor, et al., United States District Court for the Northern District of
California San Francisco Division. Expert on behalf of Hynix Semiconductor, Inc. and
Hynix Semiconductor America, Inc. in antitrust class action. Expert Report, March 7,
2008. Deposition, April 25, 2008. Declaration, April 16, 2009.
Katherine Puffer, on behalf of herself and all others similarly situated, v. Allstate
Insurance Company in the U.S. District Court for the Northern District of Illinois
Eastern Division. Expert on behalf of Allstate Insurance Company in class action gender
discrimination case. Expert Report, April 1, 2008. Declaration, October 20, 2008.
William Syverson, Patrick Boone, Lee Deshler, Robert Flowers, Barry Gerard, Tina
Gleisner, Thomas Gomez, Edwin “Dana” Goodloe, Rolf Marsh, Daniel Moczan,
James Payne, and Antonio Rivera, individually and on behalf of others similarly
situated, v. International Business Machines Corporation in the U.S. District Court
for the Northern District of California San Jose Division. Expert on behalf of IBM in
class action age discrimination case. Expert Report, August 19, 2008. Deposition,
September 9, 2008. Declaration in support of IBM, December 19, 2008.
The United States of America v. Canada, in support of the United States’ request for
arbitration regarding Canadian softwood lumber subsidies. Expert on behalf of the
United States and US Dept. of Justice in softwood lumber international trade arbitration.
Expert Report, November 21, 2008. Expert Response Report, March 23, 2009. Expert
Rejoinder Report, June 19, 2009. Trial Testimony, July 20, 2009. Expert Report for the
Tribunal, June 15, 2010.
Valassis Communications, Inc. v. News America Incorporated, a/k/a News America
Marketing Group, News America FSI, Inc. a/k/a News America Marketing FSI,
LLC and News America Marketing In-Store Services, Inc. a/a/a News American
Marketing In-Store Services, LLC in the United States District Court for the
Eastern District of Michigan Southern Division, No. 06-10240. Expert on behalf of
New America in antitrust litigation. Expert Report, November 21, 2008. Rebuttal Expert
Report, December 26, 2008. Deposition, January 22, 2009. Supplemental Expert Report,
December 21, 2009. Supplemental Rebuttal Expert Report, January 14, 2010. Deposition,
January 25, 2010.

Valassis Communications, Inc., v. News America Incorporated, No. 07-706645-CZ.
Expert on behalf of News America in antitrust litigation. Expert Report, November 21,
2008. Rebuttal Expert Report, December 26, 2008. Deposition, January 22, 2009. Trial
Testimony, July 15-16, 2009.
EBay Seller Antitrust Litigation in the U.S. District Court for the Northern District
of California San Jose Division. Expert on behalf of Ebay Inc.’s opposition to plaintiffs’
motion for class certification in antitrust case. Declaration, August 14, 2009. Deposition,
August 28, 2009 and September 18, 2009.
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, in the
U.S. District Court for the Eastern District of New York. Expert on behalf of card
issuing banks, Visa and Mastercard in class action antitrust litigation. Expert Report,
December 14, 2009. Deposition, April 20, 2010.
Applied Medical Resources Corp., and Applied Medical Distribution Corp. v.
Ethicon Endo-Surgery, Inc. in the United States District Court for the Central
Division of California Southern Division, No. CV09-3605-RSWL (VBKx). Expert
Report, March 19, 2010. Deposition, April 15, 2010.
Wallace Bolden, et al. vs. Walsh Group, et.al in the U.S. District Court Northern
District of Illinois, Eastern Division, No. 06cv104. Expert on behalf of Walsh Group in
class action race discrimination case. Expert Report, December 22, 2010. Deposition,
February 18, 2011.
Jones, et al. vs. Wells Fargo Bank N.A., Wells Fargo Home Mortgage, Inc. in the
Superior Court of California, County of Los Angeles, BC337821. Expert on behalf of
Wells Fargo Bank in class action lending discrimination case. Expert Report &
Deposition. Trial Testimony, December 21, 2010.
Peterson v. Seagate U.S. LLC, 534 F.Supp.2d 996, 2008 WL398968. Expert on behalf
of Seagate Corporation in class action age discrimination case. Expert Report, October
25, 2010. Deposition, February 15, 2011.
NRLC and Railroad Employees, National Mediation Board Case Nos. A-13569; A13570; A-13572; A-13573; A-13574; A-13575; A-13592. Expert on behalf of major US
railroads in labor mediation. Expert Report, October 10, 2011. Testimony December,
2011.
Toyota Motor Corporation Hybrid Brake Marketing Sales Practices and Products
Liability Litigation in the United States District Court Central District of California
Southern Division, No. 8:10-ML-02172-CJC-RNB. Expert on behalf of Toyota in class
action product liability (hybrid brakes) case. Expert Report, May 28, 2012. Deposition,
July 19, 2012.

In Re Text Messaging Antitrust Litigation in the United States District Court for the
Northern District of Illinois Eastern Division, No. 8 C 7082-MDL No. 1997. Expert
on behalf of AT&T, Sprint, T-Mobile, Verizon Wireless and CTIA. Expert Report, July
3, 2013. Supplemental Expert Report, July 15, 2013.
The Apple IPod ITunes Antitrust Litigation in the Unites States District Court for
the Northern District of California Oakland Division, No. C 05 00037 YRG, C 06
04457 YRG. Expert on behalf of Apple in iPod antitrust class action. Expert Report, July
19, 2013.
The Education Management Corp. Shareholder Derivate Action in the Court of
Common Pleas of Allegheny County, Pennsylvania, Civil Division, No. GD-12008785. Expert on behalf of Education Management Corp. in a Fraudulent Job
Placement Claim and Incentive-Based Compensation Claim. Expert Report, October 14,
2013.
The J.B. Hunt Transport, Inc. Wage and Hour Litigation in the United States
District Court for the Central District of California Western Division, No. 2:07-cv08336-MWF-FMOx. Expert on behalf of J.B. Hunt Transport, Inc. in California
Dedicated Contract Services and Intermodal Services drivers’ class action. Declaration
and Expert Report, October 17, 2013.
The Apple IPod ITunes Antitrust Litigation in the Unites States District Court for
the Northern District of California Oakland Division, No. C 05 00037 YRG, C 06
04457 YRG. Expert on behalf of Apple in iPod antitrust class action. Deposition,
November 8, 2013.
The J.B. Hunt Transport, Inc. Wage and Hour Litigation in the United States
District Court for the Central District of California Western Division, No. 2:07-cv08336-MWF-FMOx. Expert on behalf of J.B. Hunt Transport, Inc. in California
Dedicated Contract Services and Intermodal Services drivers’ class action. Deposition,
December 10, 2013.

Appendix C

Materials Relied Upon
Court Documents
Declaration of Roger G. Noll on Liability and Damages, April 3, 2013
Correction to Declaration of Roger G. Noll on Liability and Damages, May 31, 2013
Rebuttal Declaration and Exhibits of Roger G Noll, November 25, 2013
Depositions
Deposition of Roger G. Noll, April 7, 2011
Deposition of Roger G. Noll, May 16, 2013
Deposition of Roger G. Noll, December 18, 2013
Expert Reports
Expert Report of Michelle M. Burtis, filed April 11, 2011
Expert Report and Exhibits Kevin M.Murphy, filed August 19, 2013 (Amended)
Supplemental Exhibits to Murphy Report, Submitted November 11, 2013.
Expert Report and Exhibits of Rober H.Topel, filed August 19, 2013 (Amended)
Supplemental Exhibits to Topel Report, Submitted December 19, 2013.
Academic Sources
George G. Judge et al., The Theory and Practice of Econometrics , John Wiley and
Sons, 1985
Arthur S. Goldberger, A Course in Econometrics , Harvard University Press, 1991
Peter Kennedy, A Guide to Econometrics (Fifth Edition) , MIT Press, 2003
Joshua D.Angrist and Jorn-Steffen Pischke, Mostly Harmless Econometrics, An
Empiricist's Companion , Princeton University Press, 2009
Charles A. Sullivan, Proving Antitrust Damages: Legal and Economic Issues , ABA
Publishing, 2010
Colin Cameron and Douglas Miller, A Practitioner's Guide to Cluster-Robust
Inferences , UC Davis, October 15, 2013
Russell Davidson and James MacKinnon, Econometric Theory and Methods , 2004
Other Documents
iPod Buyer Survey – Wave 4 Data Tables, Apple Market Research & Analysis, March
2007

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