Law Commons^™

The Implications Of Behavioral Antitrust, Maurice E. Stucke

College of Law Faculty Scholarship

Behavioral economics is now mainstream. It is also timely. The financial crisis raised important issues of market failure, weak regulation, moral hazard, and our lack of understanding about how many markets actually operate.

As behavioral economics (with its more realistic assumptions of human behavior) goes mainstream in academia and the business world, one expects lawyers and economists to bring the current economic thinking to the competition agencies. How should the competition agencies respond?

This paper examines how competition authorities can consider the implications of behavioral economics on four levels: first as a gap filler, i.e., to help explain “real world” …

Reconsidering Competition, Maurice E. Stucke

College of Law Faculty Scholarship

In light of the financial crisis and the empirical findings from behavioral economics, policymakers should reconsider the fundamental question: what is competition? Only in understanding competition can one understand what competition can or cannot achieve under certain circumstances.

This Article reexamines one premise of competition, namely the extent to which firms, consumers, and the government are rational and act with perfect willpower. In varying this assumption, this Article maps four scenarios of competition.

Competition authorities should revisit their conception of competition, including the underlying assumptions, to better understand the competitive dynamics in different industries. In engaging in this review, competition …

Behavioral Antitrust, Maurice E. Stucke, Amanda P. Reeves

College of Law Faculty Scholarship

Competition policy is entering a new age. Interest in competition laws has increased world-wide, and the United States no longer holds a monopoly on antitrust policy. In the aftermath of the financial crisis, the question for competition authorities is whether and to what extent does bounded rationality, self-interest and willpower matter.

This article explores how the behavioral economics literature will advance competition policy. With increasing interest in the United States and abroad in the implications of behavioral economics for competition policy, this Article first provides an overview of behavioral economics. It next discusses how the assumption of rational, self-interested profit-maximizers …