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Old lady charm: explaining the persistent appeal of Chicago antitrust

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  • Giocoli, Nicola

Abstract

The paper deals with the mysterious persistence of the Chicago approach as the main analytical engine driving antitrust enforcement in the US. While the approach has been almost completely replaced in contemporary industrial economics by the so-called Post-Chicago view, with its superior game-theoretic toolbox, Chicago arguments still permeate antitrust case law at all judicial level, including the Supreme Court’s. Chicago rise to dominance in US courtrooms has allegedly been due to the superiority of its economic analysis. It is thus legitimate to ask why the analytical edge of the Post-Chicago approach has failed to produce the same outcome. Answering this kind of questions is crucial to understand how economists persuade, i.e., how economic arguments may be accepted and applied by policy- or law-makers. The paper offers a series of explanations, most of which inspired by the chapters in Robert Pitofsky’s collection How the Chicago School Overshot the Mark (OUP 2008). It is argued that none of these answers is completely exhaustive, though each may account for a bit of the story.

Suggested Citation

  • Giocoli, Nicola, 2012. "Old lady charm: explaining the persistent appeal of Chicago antitrust," MPRA Paper 39244, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39244
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    File URL: https://mpra.ub.uni-muenchen.de/39244/1/MPRA_paper_39244.pdf
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    References listed on IDEAS

    as
    1. Nicola Giocoli, 2014. "Games judges don't play: predatory pricing and strategic reasoning in US antitrust," Supreme Court Economic Review, University of Chicago Press, vol. 21(1), pages 271-330.
    2. Nicola Giocoli, 2011. "When low is no good: Predatory pricing and U.S. antitrust law (1950--1980)," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 18(5), pages 777-806, December.
    3. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
    4. Giocoli, Nicola, 2008. "Competition vs. property rights: American antitrust law, the Freiburg School and the early years of European competition policy," MPRA Paper 33807, University Library of Munich, Germany.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    6. Franklin M. Fisher, 1989. "Games Economists Play: A Noncooperative View," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 113-124, Spring.
    7. Bruce H. Kobayashi, 2010. "The Law and Economics of Predatory Pricing," Chapters,in: Antitrust Law and Economics, chapter 6 Edward Elgar Publishing.
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    Citations

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    Cited by:

    1. Stephen Martin, 2015. "Areeda–Turner and the Treatment of Exclusionary Pricing under U.S. Antitrust and EU Competition Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(3), pages 229-252, May.
    2. Bougette, Patrice & Budzinski, Oliver & Marty, Frédéric, 2017. "Exploitative abuse and abuse of economic dependence: What can we learn from the industrial organization approach?," Ilmenau Economics Discussion Papers 111, Ilmenau University of Technology, Institute of Economics.
    3. Bougette, Patrice & Deschamps, Marc & Marty, Frédéric, 2015. "When Economics Met Antitrust: The Second Chicago School and the Economization of Antitrust Law," Enterprise & Society, Cambridge University Press, vol. 16(02), pages 313-353, June.
    4. Signorino, Rodolfo, 2012. "Old lady charm: a comment," MPRA Paper 39211, University Library of Munich, Germany.

    More about this item

    Keywords

    Chicago school; antitrust; Post-Chicago approach;

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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