Monday, December 22, 2008
Posted by D. Daniel Sokol
David Lewis (Competition Tribunal of South Africa) discusses Competition Law and Policy in Bad Times.
ABSTRACT: Macroeconomists often stand accused—with good reason—of treating firms
as black boxes whose diverse features are not acknowledged, or even
understood, when responses to fiscal and monetary policy decisions are
considered. But by the same token, much of microeconomics treats the
broader economic and political context as a black box, as a mere
neutral stage on which firms and individuals interact. Competition and
regulatory economics, in all its stimulating, mind-bending complexity
is the province of very clever microeconomists who endlessly model and
theorize the strategic interactions of firms and the behavior of
consumers without giving much thought to the context in which this
However, broader contextual issues set the stage for those interactions and when that set changes, the parameters and possibilities, the outcomes and the public expectations of regulatory interventions shift, sometimes markedly. We are currently experiencing such a change in the stage set, and I want to look at the immediate prospects for competition law and policy in this changed context.