Easterbrook On Errors

The 1984 article by Frank Easterbrook, The Limits of Antitrust, has had considerable influence on antitrust enforcement and adjudication. Principally, Easterbrook focused on the things that antitrust could not do well. When antitrust's reach exceeds its grasp, it creates type I and type II errors. But Easterbrook points out that, in antitrust matters, type II errors are largely self-correcting. Letting price-fixers go free may be a mistake, but cartels are prisoner's dilemmas, so the mistake is corrected in the market. Letting monopolizers continue to raise prices may be an error, but new-firm entry will solve that problem as well. Easterbrook provides a taxonomy of the sources of antitrust errors, including the difficulty that antitrust defendants have in explaining procompetitive rationales and the difficulty that judges and juries have in understanding the theory and empirics involved in antitrust cases.