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Asymmetric Stakes In Antitrust Litigation, Erik Hovenkamp, Steven C. Salop
Asymmetric Stakes In Antitrust Litigation, Erik Hovenkamp, Steven C. Salop
Georgetown Law Faculty Publications and Other Works
Private antitrust litigation often involves a dominant firm being accused of exclusionary conduct by a smaller rival or entrant. Importantly, the firms in such cases generally have asymmetric stakes: the defendant typically has a much larger financial interest on the line. We explore the broad policy implications of this fact using a novel model of litigation with endogenous effort. Asymmetric stakes lead dominant defendants to invest systematically more resources into litigation, causing the plaintiff's success probability to fall below the efficient level--a distortion that carries over to ex ante settlements. We explain that enhanced damages may reduce the problem, but …
The Raising Rivals' Cost Foreclosure Paradigm, Conditional Pricing Practices, And The Flawed Incremental Price-Cost Test, Steven C. Salop
The Raising Rivals' Cost Foreclosure Paradigm, Conditional Pricing Practices, And The Flawed Incremental Price-Cost Test, Steven C. Salop
Georgetown Law Faculty Publications and Other Works
There are two overarching legal paradigms for analyzing exclusionary conduct in antitrust – predatory pricing and the raising rivals’ costs characterization of foreclosure. Sometimes the choice of paradigm is obvious. Other times, it may depend on the structure of the plaintiff’s allegations. Some types of conduct, notably conditional pricing practices (CPPs), might appear by analogy to fit into both paradigms. CPPs involve pricing that is conditioned on exclusivity or some other type of favoritism in a customer’s purchases or input supplier’s sales. The predatory pricing paradigm would attack the low prices of CPPs. By contrast, the RRC foreclosure paradigm would …
Potential Competitive Effects Of Vertical Mergers: A How-To Guide For Practitioners, Steven C. Salop, Daniel P. Culley
Potential Competitive Effects Of Vertical Mergers: A How-To Guide For Practitioners, Steven C. Salop, Daniel P. Culley
Georgetown Law Faculty Publications and Other Works
The purpose of this short article is to aid practitioners in analyzing the competitive effects of vertical and complementary product mergers. It is also intended to assist the agencies if and when they undertake revision of the 1984 U.S. Vertical Merger Guidelines. Those Guidelines are out of date and do not reflect current enforcement or economic thinking about the potential competitive effects of vertical mergers. Nor do they provide the tools needed to carry out a modern competitive effects analysis. This article is intended to partially fill the gap by summarizing the various potential competitive harms and benefits that can …