Thursday, December 11, 2008
Posted by D. Daniel Sokol
Christoph Engel, Max Planck Institute for Research on Collective Goods has a new paper on The Relevance of Behavioural Economics in Antitrust.
ABSTRACT: Hardly any antitrust lawyer would deny that antitrust needs solid foundations in economics. Antitrust authorities hire economists, if they do not even haven the position of a chief economist. Antitrust not only capitalises on economic theory, but it is equally sensitive to empirical studies, be it case studies or econometrics. Yet antitrust has been much less open to behavioural research, although quite some antitrust issues are reflected in a rich body of experimental evidence.
This paper mainly serves a methodological purpose. Relying on a meta-study of oligopoly experiments published elsewhere, it demonstrates in which way experimental evidence can productively be introduced into the antitrust discourse. To that end, it presents main effects, interaction effects, effect sizes and multivariate statistics, and discusses pertinent doctrinal reflection points. The paper concludes by showing how a new experiment, triggered by a doctrinal issue, can be used to inform the antitrust authorities.