Law and Economics Commons^™

Richard A. Posner: A Study In Judicial Entrepreneurship, Sean J. Shannon

Dissertations, Theses, and Capstone Projects

This dissertation analyzes the role of Richard Posner, one of the most prolific and innovative legal thinkers over the past forty years, as a judicial entrepreneur in his efforts to persuade the legal academy and judiciary to incorporate economic principles into the judicial decision making process in market and non-market areas of the law and legal discourse and thereby to re-examine the role of the judge. Though political scientists have explored the entrepreneurial activities of policy makers and political actors, they have given little attention to the role of judges as judicial entrepreneurs. This dissertation develops a comprehensive theoretical understanding …

Overlapping Financial Investor Ownership, Market Power, And Antitrust Enforcement: My Qualified Agreement With Professor Elhauge, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

As is well known among financial economists but not previously recognized within the antitrust community, large and diversified institutional investors such as BlackRock, Fidelity, State Street, and Vanguard collectively own roughly two-thirds of the shares of publicly traded U.S. firms overall, up from about one-third in 1980. Recent economic research involving airlines and banking raises the possibility that overlapping ownership of horizontal rivals by diversified financial institutions facilitates anticompetitive conduct throughout the economy, and that the problem has been growing for decades, unnoticed until now. This response to an article by Professor Einer Elhauge, explains why it may be more …

Competition Law For A Post-Scarcity World, Salil K. Mehra

Texas A&M Law Review

Writers, economists and IP scholars have hailed signs of an incipient shift to a post-scarcity world. Driving this change are rapid decreases not only in marginal cost, but also in the fixed or first-unit costs of production. Whether these changes become economy-wide, or remain confined to a subset of industries, they have dramatic implications for competition law and policy. This Article is the first to address these implications. In particular, because of the incentive for incumbent firms to engage in what may be termed “anti-disruption” – as examples such as the Apple/e-books antitrust case and the regulatory responses to Uber …

Facilitating Competition By Remedial Regulation, Kristelia A. García

Publications

In music licensing, powerful music publishers have begun—for the first time ever— to withdraw their digital copyrights from the collectives that license those rights, in order to negotiate considerably higher rates in private deals. At the beginning of the year, two of these publishers commanded a private royalty rate nearly twice that of the going collective rate. This result could be seen as a coup for the free market: Constrained by consent decrees and conflicting interests, collectives are simply not able to establish and enforce a true market rate in the new, digital age. This could also be seen as …

Closing Fireside Chat With The Assistant Attorney General For The U.S. Department Of Justice Antitrust Division, William Baer, Philip J. Weiser

Publications

This Closing Fireside Chat was the final session of the 16th annual Silicon Flatirons Center conference, The Digital Broadband Migration: The Evolving Industry Structure of the Digital Broadband Landscape, held on Feb. 1, 2016 in the Wittemyer Courtroom of the University of Colorado Law School.

"At the time this conference was held, William J. Baer was Assistant Attorney General for Antitrust in the United States Department of Justice. On April 17, 2016, President Obama asked Mr. Baer to become Acting Associate Attorney General of the United States. Video of this interview with Assistant Attorney General Baer is available at https://www.youtube.com/watch?v=C351xEX0h4g …

Not Treble Damages: Cartel Recoveries Are Mostly Less Than Single Damages, John M. Connor, Robert H. Lande

All Faculty Scholarship

Antitrust law provides treble damages for victims of antitrust violations, but the vast majority of private cases settle. The average or median size of these settlements relative to the overcharges involved has, until now, been only the subject of anecdotes or speculation. To ascertain what we term "Recovery Ratios," we assembled a sample consisting of every completed private U.S. cartel case discovered from 1990 to mid-2014 for which we could find the necessary information. For each of these 71 cases we collected, we assembled neutral scholarly estimates of affected commerce and overcharges. We compared these to the damages secured in …

United States - European Economic Community Antidumping Laws: The Need For A Comprehensive Approach, Larry B. Loftis

Georgia Journal of International & Comparative Law

No abstract provided.

Antitrust, Competition Policy, An Inequality, Jonathan Baker, Steven Salop

Scholarly Articles in Law Reviews & Journals

Economic inequality recently has entered the political discourse in a highly visible way. This political impact is not a surprise. As the U.S. economy has begun to recover from the Great Recession since mid-2009, economic growth has effectively been appropriated by those already well off, leaving the median household less well off. The serious economic, political and moral issues raised by inequality can be addressed through a panoply of public policies including competition policy, the focus of this article. The article describes the channels through which market power contributes to inequality, and sets forth a range of possible antitrust policy …

E-Books, Collusion, And Antitrust Policy: Protecting A Dominant Firm At The Cost Of Innovation, Nicholas Timchalk

Seattle University Law Review

Amazon’s main rival, Apple, went to great lengths and took major risks to enter the e-book market. Why did Apple simply choose not to compete on the merits of its product and brand equity (the iPad and iBookstore) as it does with its other products? Why did Apple decide not to continue to rely on its earlier success of situating its products differently in the market than other electronics and working hard to be different and cutting-edge with its e-book delivery? This Note argues that the combination of Amazon’s 90% market share, network externalities, and an innovative technology market creates …

Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane

Articles

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments. …

Measuring Benchmark Damages In Antitrust Litigation, Justin Mccrary, Daniel L. Rubinfeld

Faculty Scholarship

We compare the two dominant approaches to estimation of benchmark damages in antitrust litigation, the forecasting approach and the dummy variable approach. We give conditions under which the two approaches are equivalent and present the results of a small simulation study.

Defying Conventional Wisdom: The Case For Private Antitrust Enforcement, Joshua P. Davis, Robert H. Lande

All Faculty Scholarship

The conventional wisdom is that private antitrust enforcement lacks any value. Indeed, skepticism of private enforcement has been so great that its critics make contradictory claims. The first major line of criticism is that private enforcement achieves too little — it does not even minimally compensate the actual victims of antitrust violations and does not significantly deter those violations. A second line of criticism contends that private enforcement achieves too much — providing excessive compensation, often to the wrong parties, and producing overdeterrence. This article undertakes the first ever systematic evaluation of these claims. Building upon original empirical work and …

Toward An Empirical And Theoretical Assessment Of Private Antitrust Enforcement, Joshua P. Davis, Robert H. Lande

All Faculty Scholarship

The dominant view in the antitrust field is that private enforcement cases, and especially class actions, accomplish little or nothing positive but, on the contrary, are counterproductive. Despite strongly worded convictions, that view has been premised on anecdotal, self-serving and insufficiently substantiated claims. Indeed, the authors' 2008 study of 40 private cases appears to constitute the only systematic effort to gather information about a significant number of private antitrust actions. That study generated a great deal of controversy, including questioning of our conclusions by high officials at the Department of Justice and by Professor Daniel Crane at the University of …

The Department Of Justice Merger Guidelines: A Critique And A Proposed Improvement, R. Preston Mcafee, Michael A. Williams

Pepperdine Law Review

No abstract provided.

Asia And Global Competition Law Convergence, David J. Gerber

All Faculty Scholarship

No abstract provided.

Economics And Politics: Perspectives On The Goals And Future Of Antitrust, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

This article examines the roles of economics and politics in U.S. antitrust from several perspectives. It explains why the modern debate over the economic welfare standard that enforcers and courts should pursue is unsatisfying. It connects economics and politics by describing antitrust’s economic goals as the product of a mid-20th century political understanding about the nature of economic regulation that has continued in force to this day. To protect that understanding, it explains, antitrust rules should now be implemented using a qualified consumer welfare standard. The article also identifies contemporary political tensions that threaten to create regulatory gridlock, or even …

Antitrust Law And Economic Theory: Finding A Balance, Edward D. Cavanagh

Faculty Publications

Over the past forty years, the federal courts have relied more and more on economic theory to inform their antitrust analyses. Economic theory has indeed provided guidance with respect to antitrust issues and assisted the courts in reaching rational outcomes. At the same time, infusion of economic evidence into antitrust cases has made these cases more complex, lengthier, more expensive to litigate, and less predictable.

This Article argues that courts need to restore the balance between facts and economic theory in undertaking antitrust analysis. The problem is not that judges and juries cannot reach good outcomes in antitrust cases, but …

Exclusion As A Core Competition Concern, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

A contemporary consensus in antitrust discourse inappropriately places exclusionary conduct at the periphery of competition policy, while putting collusion at the core. Contrary to that common view, exclusion is as important as collusion as a matter of precedent, the structure of doctrinal rules, economics, and sound competition policy. Courts treat exclusionary violations as serious competitive problems. An emerging doctrinal rule for truncated condemnation of “plain” exclusionary conduct (practices foreclosing rivals that lack a plausible efficiency justification) parallels the evolving judicial approach toward “naked” collusion. Exclusion and collusion can be understood within a common economic framework that emphasizes the close relationship …

Consumer Choice As The Best Way To Describe The Goals Of Competition Law, Robert H. Lande

All Faculty Scholarship

This article is both a short introduction to the Consumer Choice explanation for Competition Law or Antitrust Law, and also a short advocacy piece suggesting that Consumer Choice is the best way to articulate the goals of European Competition Law and United States Antitrust Law.

This article briefly:

1. defines the consumer choice approach to antitrust or competition law and shows how it differs from other approaches;
2. shows that the antitrust statutes and theories of violation embody a concern for optimal levels of consumer choice;
3. shows that the United States antitrust case law embodies a concern for optimal levels of consumer …

Antitrust Energy, D. Daniel Sokol, Barak Orbach

UF Law Faculty Publications

Marking the centennial anniversary of Standard Oil Co. v. United States, we argue that much of the critique of antitrust enforcement and the skepticism about its social significance suffer from “Nirvana fallacy” — comparing existing and feasible policies to ideal normative policies, and concluding that the existing and feasible ones are inherently inefficient because of their imperfections. Antitrust law and policy have always been and will always be imperfect. However, they are alive and kicking. The antitrust discipline is vibrant, evolving, and global. This essay introduces a number of important innovations in scholarship related to Standard Oil and its modern …

Section 2 Enforcement And The Great Recession: Why Less (Enforcement) Might Mean More (Gdp), Alan J. Meese

Faculty Publications

The Great Recession has provoked calls for more vigorous regulation in all sectors, including antitrust enforcement. After President Obama took office, the Antitrust Division of the Department of Justice abandoned the Bush Administration’s standard of liability under section 2 of the Sherman Act, which forbids unlawful monopolization, as insufficiently interventionist. Based on the premise that similarly lax antitrust enforcement caused and deepened the Great Depression, the Obama Administration outlined a more intrusive and consumer-focused approach to section 2 enforcement as part of a larger national strategy to combat the “extreme” economic crisis the nation was then facing.

This Essay draws …

Parallel Exclusion, C. Scott Hemphill, Tim Wu

Faculty Scholarship

Scholars and courts have long debated whether and when "parallel pricing" – adoption of the same price by every firm in a market – should be considered a violation of antitrust law. But there has been a comparative neglect of the importance of "parallel exclusion" – conduct, engaged in by multiple firms, that blocks or slows would-be market entrants. Parallel exclusion merits greater attention, for it can be far more harmful than parallel price elevation. Setting a high price leaves the field open for new entrants and may even attract them. In contrast, parallel action that excludes new entrants both …

Were Standard Oil's Railroad Rebates And Drawbacks Cost Justified?, Daniel A. Crane

Articles

In this essay, written for a symposium on the centennial anniversary of the Supreme Court's Standard Oil decision, I reexamine the costjustification question. In the first part, I explain why the cost-justification question is central to the entire case and its acquired and evolving historical meaning. In the second part, I review the evidence of claimed efficiencies passed on to the railroads. I conclude that there is evidence that Standard Oil passed along significant cost savings to the railroads and that these savings could have justified a portion of the rebates and drawbacks. However, I conclude that there is little …

Plus Factors And Agreement In Antitrust Law, William E. Kovacic, Robert C. Marshall, Leslie M. Marx, Halbert L. White

Michigan Law Review

Plus factors are economic actions and outcomes, above and beyond parallel conduct by oligopolistic firms, that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action. Possible plus factors are typically enumerated without any attempt to distinguish them in terms of a meaningful economic categorization or in terms of their probative strength for inferring collusion. In this Article, we provide a taxonomy for plus factors as well as a methodology for ranking plus factors in terms of their strength for inferring explicit collusion, the strongest of which are referred to as "super plus factors."

Explaining The Importance Of Public Choice For Law, D. Daniel Sokol

UF Law Faculty Publications

The next generation of government officials, business leaders and members of civil society likely will draw from the current pool of law school students. These students often lack a foundation of the theoretical and analytical tools necessary to understand law's interplay with government. This highlights the importance of public choice analysis. By framing issues through a public choice lens, these students will learn the dynamics of effective decision-making within various institutional settings. Filling the void of how to explain the decision-making process of institutional actors in legal settings is Public Choice Concepts and Applications in Law by Maxwell Stearns and …

Antitrust Review Of The At&T/T-Mobile Transaction, Maurice E. Stucke, Allen Grunes

College of Law Faculty Scholarship

In this Essay, we review AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA, Inc., under federal merger law, under the U.S. Department of Justice and Federal Trade Commission’s 2010 Horizontal Merger Guidelines, and with a focus on possible remedies. We find, under a rule of law approach, that the proposed acquisition is presumptively anticompetitive, and the merging parties in their public disclosures have failed to overcome this presumption. Next we find that under the Merger Guidelines, there is reason to believe that the transaction may result in higher prices to consumers under several different plausible theories. Finally, we turn …

Bricks, Mortar, And Google: Defining The Relevant Antitrust Market For Internet-Based Companies, Jared Kagan

NYLS Law Review

No abstract provided.

Towards An International Dialogue On The Institutional Side Of Antitrust, Philip J. Weiser

Publications

The antitrust world is now globalized and interconnected, requiring ever-increasing awareness as to how different agencies operate. The need to promote convergence on substantive doctrines has received, and will continue to receive, considerable attention. What is less appreciated is the need to focus on institutional design and practice, particularly as to the promotion of transparency and procedural fairness in the conduct of antitrust investigations. This Essay makes the case for such a focus, explaining how one of the healthy aspects of a multijurisdictional world is that sister agencies can challenge one another and model means of improving our institutional practices. …

Antitrust, Institutions, And Merger Control, D. Daniel Sokol

UF Law Faculty Publications

This Article makes two primary contributions to the antitrust literature. First, it identifies the dynamic interrelationship across antitrust institutions. Second, it provides new empirical evidence from practitioner surveys to explore how the dynamic institutional interrelationship plays out in the area of merger control. This Article provides a descriptive, analytical overview of the various institutions to better frame the larger institutional interrelations for a comparative institutional analysis. In the next Part it examines mergers as a case study of how one might apply antitrust institutional analysis across these different kinds and levels of antitrust institutions. The Article utilizes both quantitative and …

Preserving A Political Bargain: The Political Economy Of The Non-Interventionist Challenge To Monopolization Enforcement, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

The antitrust rules governing exclusionary conduct by dominant firms are among the most controversial in U.S. competition policy. During the first decade of the twenty-first century, they were debated in three arenas, involving legal policy, economic policy, and politics. In each arena, the dispute mainly arose as criticism of traditional standards by advocates of less intervention. Viewed through a political economy lens, the controversy can be understood as a potential challenge to an informal political bargain reached during the 1940s by which competition was adopted as national economic policy in preference to regulation or laissez-faire. From this perspective, and applying …