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Consumer Surplus as the Appropriate Standard for Antitrust Enforcement

by U. S. Department of Justice Antitrust Di , Russell Pittman
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Current price ₹1,336.00
Original price ₹1,446.00
Original price ₹1,446.00
Original price ₹1,446.00
(-8%)
₹1,336.00
Current price ₹1,336.00

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Book cover type: Paperback
  • ISBN13: 9781289008505
  • Binding: Paperback
  • Subject: N/A
  • Publisher: Bibliogov
  • Publisher Imprint: Bibliogov
  • Publication Date:
  • Pages: 22
  • Original Price: USD 14.75
  • Language: English
  • Edition: N/A
  • Item Weight: 59 grams
  • BISAC Subject(s): General

In antitrust enforcement as in cost-benefit analysis, neoclassical economics may be interpreted as arguing for the use of a "total welfare" standard whose implementation treats transfers as welfare-neutral. Several recent papers call for antitrust agencies to move in the direction of this version of a total welfare standard for enforcement. However, as Williamson (1968) noted, horizontal mergers typically result in transfers that may greatly exceed in magnitude any deadweight loss or efficiency gain, so that a decision to ignore transfers may be quite important. I argue that such transfers are likely overall to be quite regressive, and thus that a consumer surplus standard rather than a total welfare standard may be appropriate for antitrust. Two common arguments against this standard â " that most mergers are in markets for intermediate goods, and that a consumer welfare standard implies a tolerance for monopsony â " are examined and found wanting. I argue in addition that, even if a total welfare standard is used, both the finance literature on merger outcomes and the structure of the U.S. enforcement agencies suggest that the use of a consumer surplus standard by the agencies is more likely to achieve that goal.

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