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Williamson’s Welfare Trade-Off Around the World

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Listed:
  • Germán Bet

    (University of Florida)

  • Roger D. Blair

    (University of Florida)

Abstract

Fifty years ago, Williamson (Am Econ Rev 58:23, 1968) argued that an efficiency-enhancing merger that reduces production costs but increases market power could be saved from antitrust condemnation if the cost savings created by the merger offset the allocative inefficiency. In this paper, we discuss some extensions of Williamson’s basic welfare tradeoff, and explore the attitudes of several countries around the world toward merger efficiencies. In spite of its economic logic, Williamson’s analysis has not been embraced by most of the antitrust authorities around the world. We explore different reasons why antitrust authorities have failed to adopt an explicit social-welfare standard.

Suggested Citation

  • Germán Bet & Roger D. Blair, 2019. "Williamson’s Welfare Trade-Off Around the World," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(3), pages 515-533, November.
    • Handle: RePEc:kap:revind:v:55:y:2019:i:3:d:10.1007_s11151-019-09708-3
    DOI: 10.1007/s11151-019-09708-3
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    References listed on IDEAS

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    Cited by:

    1. David E. M. Sappington & Dennis L. Weisman, 2021. "Vertical Merger Policy: Special Considerations in Regulated Industries," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 393-407, September.
    2. Dennis L. Weisman, 2020. "Complementarities as an antitrust defense," Competition and Regulation in Network Industries, , vol. 21(4), pages 344-366, December.

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    More about this item

    Keywords

    Merger; Antitrust; Welfare standard; Efficiencies;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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