Wednesday, May 13, 2009
Posted by D. Daniel Sokol
On the Supreme Court short-list is Diane Wood (7th Circuit, University of Chicago Law) who writes on Square Pegs in Round Holes: The Interaction between Judges and Economic Evidence.
ABSTRACT: Competition law is not the only area in which it is essential that decision-makers understand economic evidence, but it is surely one of the most important. After all, the concept of competition itself conjures up images of rivalry for some sort of prize, and in the area of competition law, that prize is success in the market. Through the magic of microeconomic analysis, it has become well accepted that the competitive process between or among producers yields not only a winner from the producer standpoint, but more importantly yields benefits to consumers. The latter benefits, which normally take the form of lower prices, better quality, superior ancillary services, or some combination of those features, involve a transfer of wealth from the producer to the consumer, and thus would not necessarily exist in a world without competition.
All of that may be relatively easy to say, but when it comes to the real world, matters quickly become more complex. The judge has no choice but to study the economic evidence that is presented by the parties and to come to a conclusion that is consistent with that evidence. This paper considers whether judges have been up to that task.