Antitrust Policy: A Century of Economic and Legal Thinking
AbstractPassage of the Sherman Act in the United States in 1890 set the stage for a century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the Sherman Act is unequaled in its generality. The Act outlawed "every contract, combination or conspiracy in restraint of trade" and "monopolization" and treated violations as crimes. By these open-ended commands, Congress gave federal judges extraordinary power to draw lines between acceptable cooperation and illegal collusion, between vigorous competition and unlawful monopolization. By enlisting the courts to elaborate the Sherman Act' s broad commands, Congress gave economists a singular opportunity to shape competition policy. Because the statute' s vital terms directly implicated economic concepts, their interpretation inevitably would invite contributions from economists. What emerged is a convergence of economics and law without parallel in public oversight of business. As economic learning changed, the contours of antitrust doctrine and enforcement policy eventually would shift, as well. This article follows the evolution of thinking about competition since 1890 as reflected by major antitrust decisions and research in industrial organization. We divide the U.S. antitrust experience into five periods and discuss each period' s legal trends and economic thinking in three core areas of antitrust: cartels, cooperation, or other interactions among independent firms; abusive conduct by dominant firms; and mergers.
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Bibliographic InfoPaper provided by EconWPA in its series Law and Economics with number 0303006.
Length: 27 pages
Date of creation: 27 Mar 2003
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Other versions of this item:
- William E. Kovacic & Carl Shapiro, 2000. "Antitrust Policy: A Century of Economic and Legal Thinking," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 43-60, Winter.
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- K00 - Law and Economics - - General - - - General (including Data Sources and Description)
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-02 (All new papers)
- NEP-COM-2003-04-02 (Industrial Competition)
- NEP-HIS-2003-04-02 (Business, Economic & Financial History)
- NEP-IND-2003-04-02 (Industrial Organization)
- NEP-LAW-2003-04-02 (Law & Economics)
- NEP-MIC-2003-04-02 (Microeconomics)
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