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Market share and market power in merger and monopolization cases
Author(s) -
Cameron Duncan,
Glick Mark
Publication year - 1996
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/(sici)1099-1468(199603)17:2<193::aid-mde762>3.0.co;2-y
Subject(s) - monopolization , sophistication , market power , economics , enforcement , market share , market definition , nonmarket forces , law and economics , industrial organization , merger guidelines , market economy , business , factor market , microeconomics , market structure , law , monopoly , political science , commission , finance , sociology , social science
In light of the growing sophistication of the tools of industrial organization economics and reliance on the federal courts to resolve complicated competitive issues, it may be time for the courts to make greater use of economists in analyzing antitrust cases. While the costs of such an endeavor remain unexplored, we argue below that the benefits may be significant. In particular, we assert that the legal precedent requiring the courts to draw inferences about market power based primarily or exclusively on market shares and/or market concentration 1 can often be misleading. However, the only alternative to such judge‐made bright‐line rules is to utilize modern economic tools to undertake more extensive competitive analyses. The latter choice is essentially the course that the antitrust enforcement agencies are following. This article explores some of the arguments in favor of such an approach.