The Economics of Welfare Standards in Antitrust
AbstractThere has been considerable debate concerning whether consumer surplus or total surplus should be the welfare standard for antitrust. This debate misses two critical issues. First, antitrust is not straightforwardly welfaristâ€”it does not maximize but protects, and it does not forbid all actions that seem likely to lower some welfare measure. Rather, antitrust enforcement has both process and consequence components: â€œanticompetitiveâ€ actions that harm consumers are illegal but other actions that harm consumers are not. Second, the enforcement process involves multiple steps and multiple decision makers. Mergers, for instance, are proposed by the merging parties, reviewed and perhaps challenged by antitrust agencies, and reviewed by courts. Hence, a full discussion of what standard is or should be applied must specify by whom and how it fits in the overall process. We conclude that, while some popular arguments for a consumer surplus standard are weak, other arguments have some merit.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Competition Policy Center, Institute for Business and Economic Research, UC Berkeley in its series Competition Policy Center, Working Paper Series with number qt1tw2d426.
Date of creation: 20 Jul 2006
Date of revision:
Contact details of provider:
Postal: F502 Haas, Berkeley CA 94720-1922
Phone: (510) 642-1922
Fax: (510) 642-5018
Web page: http://www.escholarship.org/repec/iber_cpc/
More information through EDIRC
antitrust; merger policy; consumer surplus; welfare analysis; antitrust standards;
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Armstrong, Mark & Vickers, John, 2008.
"A model of delegated project choice,"
8963, University Library of Munich, Germany.
- Kaplow, Louis & Shapiro, Carl, 2007.
Handbook of Law and Economics,
- Louis Kaplow & Carl Shapiro, 2007. "Antitrust," NBER Working Papers 12867, National Bureau of Economic Research, Inc.
- Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Competition Policy Center, Working Paper Series qt9pt7p9bm, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Oliver Budzinski, 2009. "Modern Industrial Economics and Competition Policy: Open Problems and Possible Limits," Working Papers 93/09, University of Southern Denmark, Department of Environmental and Business Economics.
- Dennis W. Carlton, 2007.
"Does Antitrust Need to be Modernized?,"
EAG Discussions Papers
200703, Department of Justice, Antitrust Division.
- Bilotkach, Volodymyr & HÃ¼schelrath, Kai, 2012. "Airline alliances and antitrust policy: The role of efficiencies," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 76-84.
- Russ Pittman, 2007.
"Consumer Surplus as the Appropriate Standard for Antitrust Enforcement,"
Competition Policy International, vol. 3.
- Russell Pittman, 2007. "Consumer Surplus as the Appropriate Standard for Antitrust Enforcement," EAG Discussions Papers 200709, Department of Justice, Antitrust Division.
- Kamerbeek, S.P., 2009. "Merger Performance and Efficiencies in Horizontal Merger Policy in the US and the EU," MPRA Paper 18064, University Library of Munich, Germany.
- Hoernig, Steffen & Nilssen, Tore & Pita Barros, Pedro Luis, 2008.
"Keeping Both Eyes Wide Open: The Life of a Competition Authority Among Sectoral Regulators,"
CEPR Discussion Papers
6861, C.E.P.R. Discussion Papers.
- Barros, Pedro P. & Hoernig, Steffen & Nilssen, Tore, 2008. "Keeping Both Eyes Wide Open: The Life of a Competitive Authority among Sectoral Regulators," Memorandum 12/2008, Oslo University, Department of Economics.
- Fumagalli, Eileen & Nilssen, Tore, 2008. "Waiting to Merge," Memorandum 13/2008, Oslo University, Department of Economics.
- Jarig Sinderen & Ron Kemp, 2008. "The Economic Effect Of Competition Law Enforcement: The Case Of The Netherlands," De Economist, Springer, vol. 156(4), pages 365-385, December.
- Marc Fusaro & Richard Ericson, 2010. "The Welfare Economics of “Bounce Protection” Programs," Journal of Consumer Policy, Springer, vol. 33(1), pages 55-73, March.
- John Vickers & Mark Armstrong, 2007. "A Model of Delegated Project Choice With Application to Merger Policy," Economics Series Working Papers 347, University of Oxford, Department of Economics.
- Fiammetta Gordon & David Squires, 2008. "The Deterrent Effect of UK Competition Enforcement," De Economist, Springer, vol. 156(4), pages 411-432, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.