Lectures on Antitrust Economics

Competition Policy and Antitrust

Article Snapshot

Author(s)

Michael Whinston

Source

MIT Press, 2006

Summary

This book surveys recent issues in competition policy.

Policy Relevance

Even in areas where competition policy seems to be settled, economists do not always agree on the right approach.

Main Points

  • Antitrust law is different from regulation. Regulation focuses on prices and behavior in one sector, while antitrust law maintains basic rules for competition.

  • The two types of competition cases are those involving collusion between firms, and those in which a firm or firms tries to exclude rivals from the market.

  • Economists generally agree that price fixing, when firms collude to raise prices, is harmful, but even here there are some surprisingly difficult cases. 

  • Horizontal mergers, when competing firms merge, also present interesting questions for scholars.

  • Exclusionary vertical contracts, by which a competitor seeks to exclude a rival, are controversial. Some scholars with the “Chicago School” argue that it is doubtful that these contracts will usually harm competition, but recent work shows that in some cases these contracts might work to harm competition.

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