Law and Economics Commons^™

Market Power And Inequality: The Antitrust Counterrevolution And Its Discontents, Lina M. Khan, Sandeep Vaheesan

Faculty Scholarship

In recent years, economic inequality has become a central topic of public debate in the United States and much of the developed world. The popularity of Thomas Piketty’s nearly 700-page tome, Capital in the Twenty-First Century, is a testament to this newfound focus on economic disparity. As top intellectuals, politicians, and public figures have come to recognize inequality as a major problem that must be addressed, they have offered a range of potential solutions. Frequently mentioned proposals include reforming the tax system, strengthening organized labor, revising international trade and investment agreements, and reducing the size of the financial sector.

One …

A Unified Framework For Competition Policy And Innovation Policy, Keith N. Hylton

Faculty Scholarship

I describe a model of competition law enforcement that treats competition and innovation policy as the inseparable partners they ought to be. The enforcement authority determines an optimal punishment knowing that if it sets the penalty too high it will reduce firms’ incentives to invest in innovation, and if firms do not invest, new goods and new markets will not be created. The authority therefore moderates the penalty in order to maintain innovation incentives. The implications of this framework for competition policy and for innovation policy are quite different from what is commonly observed today. I discuss implications for competition …

Preserving Competition: Economic Analysis, Legal Standards And Microsoft, Keith N. Hylton, Ronald A. Cass

Faculty Scholarship

In a recent symposium issue of the George Mason Law Review, Steven Salop and R. Craig Romaine use the Microsoft litigation as a focus for discussion of antitrust law. Salop and Romaine argue that each of the allegations against Microsoft could constitute evidence of a design by Microsoft to reduce competition and to preserve or extend monopoly power. They argue as well that the right legal standard to apply in monopolization cases is a "competitive effects" test that balances the benefits and harms of the monopolist's conduct. This article exposes problems with their approach, explains why it departs from current …

Measuring Market Power When The Firm Has Power In The Input And Output Markets, Keith N. Hylton, Mark Lasser

Faculty Scholarship

We examine the problem of measuring market power when the firm has monopoly power in the output market and monopsony power in the input market - a case we refer to as 'dual-market' power. We show how the Lerner index, which measures the mark-up over the marginal cost, can be modified to reflect the firm's ability to set price above the competitive level.