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Predatory pricing, Predatory conduct, Vertical restraints, Merger policy, Exclusionary conduct, Monopolisation, Sherman Act, Merger Guidelines


Antitrust and Trade Regulation | Law and Economics


Recent developments in US anti-trust can be characterised as reflecting the uneasy interaction of two quite separate phenomena: first, the increased emphasis on economic analysis as the overriding organising principle of anti-trust policy and on economic efficiency as the primary (perhaps only) relevant goal for anti-trust; second, the long-standing reluctance of the federal judiciary to involve itself in any substantive economic analysis, and the preference, instead, for simple rules of thumb or ‘pigeon holes’ to sort out lawful from unlawful conduct. The result has been that while economics has played a major role, it has not influenced American anti-trust as thoroughly or as uniformly as might have been imagined; rather the extent and the nature of its influence have depended on the degree to which the relevant economics could be reduced to the kind of simple rules or pigeon holes that the judiciary favours. The present paper will illustrate that theme, first by reporting on the two developments separately and then by illustrating their joint influence with reference to two important areas of American anti-trust: predatory conduct and so-called vertical restraints. Finally, a contrast will be made between judicial development in those two areas and recent American merger policy which, it is argued, is carried out largely independently of the judiciary, and hence the opportunities for economics to influence the process are less inhibited by the judicial reluctance to undertake extensive economic analysis.

Publication Citation

George A. Hay, "Anti-Trust and Economic Theory: Some Observations from the US Experience", 6 Fiscal Studies (1985)