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The Output-Welfare Fallacy: A Modern Antitrust Paradox, John M. Newman

Articles

A fallacy lies at the core of modern antitrust. The same scholars who successfully advanced a singular consumer-welfare goal simultaneously argued that output effects should be the exclusive criterion for analysis. This output-welfare framework entered mainstream discourse, was endorsed by enforcers and judges, and played a pivotal role in the Supreme Court's recent Ohio v. American Express opinion. Yet despite its centrality, outputism has largely escaped notice.
When exposed to systematic evaluation, the previously assumed link between output and welfare breaks down. A wide variety of conduct can push output and welfare in opposite directions. Moreover, purely outputist analysis is …