Friday, October 23, 2020
In this essay we evaluate the impact of the revolution that has occurred in antitrust and in particular the growing role played by economic analysis. Section II describes exactly what we think that revolution was. There were actually two revolutions. The first was the use by economists and other academics of existing economic insights together with the development of new economic insights to improve the understanding of the consequences of certain forms of market structure and firm behaviors, as well as the application of advanced empirical techniques to large data sets. The second was a revolution in legal jurisprudence, as both the federal competition agencies and the courts increasingly accepted and relied on the insights and evidence emanating from this economic research. Section III explains the impact of the revolution on economists, consulting firms, and research in the field of industrial organization. One question it addresses is why, if economics is being so widely employed and is so useful, one finds skilled economists so often in disagreement. Section IV asks whether the revolution has been successful or whether, as some critics claim, it has gone too far. Our view is that it has generally been beneficial though, as with most any policy, it can be improved. Section V discusses some of the hot issues in antitrust today and, in particular, what some of its critics say about the state of the revolution. The final section concludes with the hope that those wishing to turn back the clock to the antitrust and regulatory policies of 50 years ago more closely study that experience, otherwise they risk having its demonstrated deficiencies be repeated by throwing out the revolution’s baby with the bathwater.