Economic Authority and the Limits of Expertise in Antitrust Cases

Competition Policy and Antitrust

Article Snapshot

Author(s)

John Lopatka and William H. Page

Source

Working Paper, 2004

Summary

This paper looks at the role of economists in antitrust cases.

Policy Relevance

Economists influence courts through their role as expert witnesses. Although some economic models are not a good match with reality, courts are unlikely to exclude the testimony.

Main Points

  • In a legal dispute, the judge decides issues of law (“is tying illegal?”); the jury decides the facts (“Did the CEO really send that email?”). Expert witnesses help the judge and the jury understand complex facts. Courts can reject the testimony of experts not considered well qualified, relevant, or reliable.
 
  • In recent decades, “Chicago School” economists lead courts to recognize that business behavior once considered harmful often benefits consumers.
 
  • Today, economists use game theory in antitrust cases to set up mathematical models showing that business behavior can be harmful. Some argue that game theory is not reliable. Models can depend on biased assumptions, or not reflect reality.
 
  • Game theory models can help courts and are actually used by economists, so arguments that they are not reliable are likely to fail.

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