For purposes of this article, we accept these conclusions as established, but note that to date exclusionary Bainian power has been more controversial and less well understood than classical Stiglerian power.
Today, a consensus is emerging that the solution to this dilemma is not to call on antitrust enforcers and judges to balance, in some unstated fashion, every social, political, or economic interest or value affected by a business decision.
Another reason for per se rules is to provide clear signals to business and to increase judicial economy. Either way consumer welfare is reduced because output below the efficient competitive level denies consumers products that they value in excess of the marginal cost of production and transfers wealth from consumers to producers.
Without discussion by the press, it's hard to find fault with bored members of a jury who know erroneously that what is going on in the courtroom is not important because nothing has been mentioned in the media.
For purposes of antitrust analysis, the crucial distinction is not between market power and monopoly power, but between two fundamentally different ways in which a firm or group of firms may exercise anticompetitive economic power-raising one's own prices classical Stiglerian power or raising competitor's costs exclusionary Bainian power.
The Justice Department's merger guidelines [FN71] begin by taking the product of one of the merging firms and asking whether a coordinated, significant price increase above the current level by all the firms making that product would be profitable.
Sometimes the exercise of Bainian power generates offsetting increases in the production efficiency of the excluding firm. From that large total, the agency can allocate each producer a relatively balanced demand for different coal sizes, thus reducing inventory costs, and shipments of unsold coal.
The majority of our Court affirmed, distinguishing between the nullification power a jury "may. This wealth transfer may be converted into an allocative efficiency loss if the producers protect or enhance their power through rent-seeking behavior and strategic entry deterrence.
In a perfectly competitive market, firms take the market price as given. BORK, supra note 23, at From the perspective of antitrust policy, the exercise of classical, Stiglerian market power and exclusionary, Bainian market power both lead to a consumer welfare loss: A more skeptical court might have said "because That knowledge is the key here may explain why both Courts emphasized that: Courts that erroneously think that the prior achievement of Stiglerian market power is necessary for the achievement or exercise of Bainian market power naturally assume that proof of Stiglerian market power is a threshold inquiry.
It isn't clear how much of BMI survived Arizona v.
Combinations of independent producers, on the other hand, organized to fix uniform prices for the sale of their products or to eliminate competition among themselves Suppose that firms with identical, constant supply curves constant marginal cost functions make widgets, and that each produces an equal amount.
Litigation, the thought goes, is more procedurally rigorous, but takes longer and costs more; arbitration, on the othe… Feature Disappearing Claims and the Erosion of Substantive Law J. We also note that the district court's "vital distinction in principle" between per se illegal naked price-fixing and the rule of reason for ventures that eliminate waste would argue for this same rule of reason approach to an attempt to ameliorate a wasteful practice that might also have an incidental effect on prices.
Consumer welfare and allocative efficiency are reduced.
However, the analysis easily can be generalized to cooperative or collusive multifirm conduct by substituting the phrase 'group of firms' for 'single firm.
First, that price-fixing agreements are illegal per se regardless of whether they are reasonable or not U. Using historical research, Hemphill and Weiser identify flexibility within the framework that permits empirically grounded evaluation of predation claims.
The Court did not discuss possible cost-raising strategies in its analysis of either theory. The paper analyzes the last three decades of debates about predatory pricing in US antitrust law, starting from the literature that followed Areeda and Turner’s landmark paper and ending in the beginning of this century, upon the Brooke decision.
Special emphasis is given to the game-theoretic approach to predation and to the reasons why this approach has never gained attention in. Jul 18, · Picker: Yes, I taught the oral argument transcript in my antitrust class.
Gorsuch was all over output, while Breyer, Kagan and Sotomayor were all. How And Why The Per Se Rule Against Price-Fixing Went Wrong. This document is available in two formats: this web page (increasing both consumer surplus and total quantity sold) Joseph P.
and William H. Page, Kintner Federal Antitrust Law, Volume II, Practices Prohibited by the Sherman Act: Anderson Publishing Co. MONOPOLY POWER AND MARKET POWER IN ANTITRUST LAW.
Thomas G. Krattenmaker Robert H. Lande Steven C. Salop more technical description of the principal argument. Readers already familiar with the main body of antitrust law and conversant with antitrust economics may wish to begin by reading the appendix.
antitrust law's increasing. The question should be well settled because antitrust law requires proof of actual or likely market power or monopoly power to establish most types of antitrust violations. scription of the principal argument.
Readers already familiar with the main • Professor of Law, Georgetown University Law Center. se" seems to point to the irrelevance of market power. An essential charac Indeed, antitrust law's increasing absorption of market power stan.An argument about the increasing irrelevance of the antitrust law