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Understanding Behavioral Antitrust, Avishalom Tor
Understanding Behavioral Antitrust, Avishalom Tor
Journal Articles
Behavioral antitrust – the application to antitrust analysis of empirical evidence of robust behavioral deviations from strict rationality – is increasingly popular and hotly debated by legal scholars and the enforcement agencies alike. This Article shows, however, that both proponents and opponents of behavioral antitrust frequently and fundamentally misconstrue its methodology, treating concrete empirical phenomena as if they were broad hypothetical assumptions. Because of this fundamental methodological error, scholars often make three classes of mistakes in behavioral antitrust analyses: First, they fail to appreciate the variability and heterogeneity of behavioral phenomena; second, they disregard the concrete ways in which markets, …
Illustrating A Behaviorally Informed Approach To Antitrust Law: The Case Of Predatory Pricing, Avishalom Tor
Illustrating A Behaviorally Informed Approach To Antitrust Law: The Case Of Predatory Pricing, Avishalom Tor
Journal Articles
One of the core assumptions of the traditional economic approach to antitrust law is that competitors are perfectly rational, profit-maximizing, decision makers. Sometimes, this assumption serves as a useful simplification of business behavior, providing an effective foundation for antitrust doctrine. At other times, however, assuming strictly rational behavior on the part of competitors is not “approximately right” but, instead, “perfectly wrong.” In these latter cases, the reliance on the perfect rationality assumption can lead scholars to mispredict market behavior and, possibly, advocate erroneous prescriptions for antitrust policy. In contrast, a behaviorally informed approach to antitrust law is based on scientific …