Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

AT Paradoxes of the Day

with 2 comments

Weird

I had weird thoughts today:

When the agency dismantles a monopoly in a market, it expands the consumer wealth open to appropriation by monopolists on other markets.

When the agency dismantles a monopoly in a market, it expands the amount of resources on which government can raise taxes.

Or the proof that all too often, we forget the basic principle that the economy works as a general equilibrium.

 

Written by Nicolas Petit

22 April 2013 at 9:01 pm

Posted in Uncategorized

2 Responses

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  1. A few economists might probably want to comment on this… Don´t try to formulate it mathematically at home! 🙂

    Alfonso Lamadrid

    22 April 2013 at 11:54 pm

  2. „Firms may acquire monopoly power by establishing an infrastructure that renders them uniquely suited to serve their customers. Compelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically facilities. Enforced sharing also requires antitrust courts to act as central planers, identifying the proper price, quantity, and other terms of dealing – a role for which they are ill suited. Moreover, compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion. Thus, as a general matter, the Sherman Act “does not restrict the long recognized right of a trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.”

    The US Supreme Court in Trinko Case (2004)
    George

    George

    23 April 2013 at 9:26 am


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