Law Commons^™

We estimate auto accident externalities (more specifically insurance externalities) using panel data on state-average insurance premiums and loss costs. Externalities appear to be substantial in traffic-dense states: in California, for example, we find that the increase in traffic density from a typical additional driver increases total state wide in-surance costs of other drivers by $1,725–$3,239 per year, depending on the model. High–traffic density states have large economically and statistically significant externalities in all specifications we check. In contrast, the accident externality per driver in low-traffic states appears quite small. On balance, accident externalities are so large that a correcting Pigouvian …

Since 1993 when the Supreme Court decided Brooke Group, no predatory pricing plaintiff has prevailed in a final determination in the federal courts. This decision was the ultimate triumph of the Chicago School antitrust scholars and judges like Frank Easterbrook, who have argued that predation is like dragons and that there is no sufficient reason for antitrust law or the courts to take it seriously. This article argues, however, that the Court's reading of the law is unduly narrow and should be revisited. There is no compelling reason to restrict predation cases to below-cost pricing, as above-cost pricing can also …