Comments on: An Antitrust Trifecta http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/ Academic commentary on law, business, economics and more Tue, 16 Mar 2010 04:09:44 -0700 http://wordpress.org/?v=2.8.5 hourly 1 By: Josh http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/comment-page-1/#comment-11311 Josh Tue, 01 Aug 2006 20:27:42 +0000 http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/#comment-11311 Thanks for the comments, guys. I still don't necessarily agree that there is anything in US doctrine itself which prevents an analysis of long run competitive harms. But the distinction between (3) and (2) where US authorities place a ZERO weight on long run harms is without much difference. In any event, your point that there may be several factors contributing to the diverengence is well taken. Thanks for the comments, guys.

I still don’t necessarily agree that there is anything in US doctrine itself which prevents an analysis of long run competitive harms. But the distinction between (3) and (2) where US authorities place a ZERO weight on long run harms is without much difference. In any event, your point that there may be several factors contributing to the diverengence is well taken.

]]> By: Hanno Kaiser http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/comment-page-1/#comment-11309 Hanno Kaiser Tue, 01 Aug 2006 19:43:27 +0000 http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/#comment-11309 Josh - Your points (1) and (2) capture what I was getting at. Today, we are generally less confident in long run predictions than, say, in the 1960s, which is why antitrust got out the business of "stemming rising tides of economic concentration." We're also less sanguine about predicting the future than the European Commission. The law of predatory pricing is a nice illustration of that. I don't mean to imply that the focus on the short run is the <em>only</em> difference, and I agree with your point (3), but I think that different time horizons contribute significantly to the divergent assessment of situations in which future harms are traded off against present gains. Josh – Your points (1) and (2) capture what I was getting at. Today, we are generally less confident in long run predictions than, say, in the 1960s, which is why antitrust got out the business of “stemming rising tides of economic concentration.” We’re also less sanguine about predicting the future than the European Commission. The law of predatory pricing is a nice illustration of that. I don’t mean to imply that the focus on the short run is the only difference, and I agree with your point (3), but I think that different time horizons contribute significantly to the divergent assessment of situations in which future harms are traded off against present gains.

]]> By: Manfred Gabriel http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/comment-page-1/#comment-11293 Manfred Gabriel Tue, 01 Aug 2006 17:45:03 +0000 http://www.truthonthemarket.com/2006/08/01/an-antitrust-trifecta/#comment-11293 Regarding Hanno's point about the short run. I think it is obvious as a general proposition that our normative assumptions about market behavior and market structure will determine antitrust policy. If the markets are generally presumed to be self-correcting, it makes sense to restrict predatory pricing claims to case that suggest that markets will not self-correct, or that interim harm is too great. If our focus is on the short run, we limit the range of market effects that we will potentially consider as interim harm. I like your differentiation of approaches, though, because (1) and (3) highlight a point about the nature of competive harm. A probabilistic assessment of the success of predatory pricing looks to the potential of self-correction of the markets (entry will prevent recoupment), but does not ask the long-range question: Even after entry during the harvest phase, will there be competitive harm as a residue of the intervening predatory pricing? I am not sure that this is a question that should be asked, but I agree with Hanno that our current doctrinal focus in the U.S. prevents us from asking it. Regarding Hanno’s point about the short run. I think it is obvious as a general proposition that our normative assumptions about market behavior and market structure will determine antitrust policy. If the markets are generally presumed to be self-correcting, it makes sense to restrict predatory pricing claims to case that suggest that markets will not self-correct, or that interim harm is too great. If our focus is on the short run, we limit the range of market effects that we will potentially consider as interim harm. I like your differentiation of approaches, though, because (1) and (3) highlight a point about the nature of competive harm. A probabilistic assessment of the success of predatory pricing looks to the potential of self-correction of the markets (entry will prevent recoupment), but does not ask the long-range question: Even after entry during the harvest phase, will there be competitive harm as a residue of the intervening predatory pricing? I am not sure that this is a question that should be asked, but I agree with Hanno that our current doctrinal focus in the U.S. prevents us from asking it.

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