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Untwisting the strands of Chicago antitrust.

Basically, all our similarities are different.

Baseball player Dale Berra,

in reference to his father, Yogi.


In the preface to his 1982 book on industrial concentration, Yale Brozen speaks of a "revolution in economics--in that part of the field called industrial organization--which is nearly complete in the professional journals." That revolution has dramatically altered the way many economists and lawyers understand both industrial organization theory and antitrust policy. Conspiracy theories of collusion among firms, advertising as a barrier to entry, ownership integration and other vertical restraints as a source of market power, and predatory pricing are just some of the formerly accepted concepts now open to question.(1) Federal Courts began accepting the "new learning" in antitrust cases in the late 1970's. In the 1980's, the Reagan administration saw individuals who have played major roles in shaping the "new learning" appointed to the federal bench and the antitrust enforcement agencies.(2)

The principal makers of Brozen's "revolution" are the scholars whose contributions his book so thoroughly documents. For the most part, they are in the Chicago/UCLA antitrust and law and economics traditions. Several years before the publication of Brozen's book, Posner commented, "The basic tenet of the Chicago school, that problems of competition and monopoly should be analyzed using the tools of general economic theory rather than those of traditional industrial organization, has triumphed."(3)

As with most revolutionary bands, the Chicago analysts are a heterogeneous bunch. A close look at the Chicago approach to industrial organization reveals two strands of thought on the nature of competition. One strand, labeled the "new Chicago" school by William Shepherd, retains the notion of perfectly competitive equilibrium as a useful tool of analysis and a relevant welfare standard.(4) The other, Shepherd's "market rivalry" school, views competition as a rivalrous process. Unfortunately for those concerned about theoretical consistency, the two strands make a poor match. Perfectly competitive equilibrium makes extreme assumptions about economic agents' knowledge; the notion of competition as a rivalrous process relaxes those assumptions in the extreme.

The tension between these strands creates an inherent contradiction in new Chicago industrial organization. Chicago's "Hypothesis 1," in Shepherd's terminology, holds that "Market dominance merely reflects superior performance or economies of scale." However, this "perfect market" view cannot really explain dominance:

If market perfection holds, then superiority is by assumption the

exclusive cause of monopoly positions. But also, if market perfection

holds, then superiority cannot exist for significant intervals of

time. . . . Either there are imperfections or there aren't. The efficiency

school may wish to have it both ways, but that is not permissible.(5)

Untwisting the Chicago strands sheds new light on the source of this contradiction, raising a number of significant research questions in both modem industrial organization and the history of economic thought.

Market rivalry

The Chicago approach to industrial organization represents an amalgam of traditional price theory, which takes perfect competition as a normative ideal, and market rivalry theories. The concept of perfect competition is so well known that it needs little elaboration. The notion of competition as a rivalrous process is as old as the Wealth of Nations itself, but it is not as prevalent in economics today as it once was.(6)

Nevertheless, notions of rivalry can be found in the writings of modem "Austrian" economists and many Chicago scholars. Shepherd, for example, classifies both sets of theorists as "efficiency school" scholars, referring to the former theorists as "market-rivalry" economists and the latter as the "new-Chicago school."(7) In addition, elements of the more heterogeneous "transaction costs" literature are also more compatible with the idea of competition as a process than with the idea of perfectly competitive equilibrium.

The concept of competition as rivalry once held such sway in the economics profession that few American economists endorsed antitrust legislation, because most of them viewed the rise of large business firms as simply evidence that competition was weeding out smaller, less efficient firms. All that changed in the 1920's. "Once perfect competition was accepted as the ideal benchmark, economists concluded that most markets were inherently monopolistic. It was not that markets themselves had become less competitive; it was that the idea of competition had changed."(8)

According to Hayek, a noted market rivalry scholar, the purpose of competition and the market process generally is not production and sale of known commodities at prices equal to marginal costs but rather the discovery of which commodities will best satisfy consumers. The entrepreneur does not just seek to produce at lower cost a product already on the market, nor is his attention confined to making marginal adjustments in product quality. In addition, he creates and introduces new products that have never been thought of before.(9) Schumpeter described this distinction most succinctly:

[I]n capitalist reality as distinguished from the textbook picture, it is

not that kind of competition which counts [competition producing

known products within known constraints] but the competition from

the new commodity, the new technology, the new source of supply,

We new type of organization. . . competition which commands a

decisive cost or quality advantage and which strikes not at the margins

of the profits and the outputs of existing firms but at their foundations

and their very lives.(10)

The entrepreneur who engages in such competition also accepts the uncertainty that a demand curve for his product may never materialize, that his new technology may contain hidden problems that make it more costly than he imagined, that his new source of supply may prove to be less certain than he thought, or that his new form of organization may not be able to out-compete the old. "Action is always speculation."(11)

Speculation never ceases for at least two reasons. Exogenous factors continually impinge upon the economic system, making continual adjustment necessary. Even if exogenous disturbances ceased, though, an economy could not be expected to gradually "settle down" into an equilibrium. Facts about both the material world and others' plans form the data upon which an individual bases his actions.(12) As individuals acquire these data, the state of their knowledge changes. Expansion of knowledge brings to their attention new oppportunities and may very well change their preferences and/or demands.(13) With new opportunities and new preferences come changes in plans that must in turn be learned by others. Each person bases his plans on his expectation of others' plans, but they too are trying to anticipate what he intends to do. The result is a process of endogenous change with no end in sight.(14)

Many of the concerns expressed in the economics literature on transactions costs fit well with this approach, because many of the transactions costs that economic agents seek to mitigate can be traced to imperfect information about the objective world or other agents' intentions. Transactions costs identified by a diverse group of theorists(15) include those associated with:

1. Discovering prices and consumer preferences;

2. Disseminating knowledge about products;

3. Measuring and securing agreement on characteristics of products

and inputs;

4. Separating contributions of different factors to the total product;

5. Curbing "opportunism," defined by Williamson as "self-interest

seeking with guile," in small-numbers situations;(16)

6. Mobilizing "knowledge of the particular circumstances of time

and place."(17)

Instead of assuming these difficulties away, the market rivalry paradigm makes them the center of attention. They are analyzed as significant economic problems in their own right, rather than sideshows to the firm's choice of optimal price and quantity. Market institutions and structure, meanwhile, become endogenous. They emerge as the result of economic actors' efforts to acquire and interpret information.(18)

Given this background, it is understandable why many market rivalry economists reject parts of received microeconomic theory as a useful tool for analysis. In traditional industrial organization, the welfare properties of general competitive equilibrium provide a normative standard for assessing market structure, conduct, and performance.(19) Of course, one of the key assumptions for general competitive equilibrium is perfect relevant knowledge.(20) As a result, the theory's positive and normative relevance is unclear when its assumptions are not met in the real world. Operationalizing the theory requires one to assume away the very reason (lack of perfect knowledge) for many phenomena one seeks to analyze.

Chicago and the equilibrium gambit

The pull of the real world is just too strong to prevent Chicago theorists from ignoring the problems of imperfect imformation that generate rivalrous competition. At the same time, the lure of rigorous theory is too strong to let them abandon the concept of perfectly competitive equilibrium as a fundamental theoretical tool for analyzing the real world.

Reder terms the Chicago attitude toward competitive equilibrium "Tight Prior Equilibrium."(21) The basic notion is that the world is close enough to perfectly competitive equilibrium that the model serves as a suitable framework for understanding real-world phenomena. Four assumptions form the bridge between the abstract model and the actions of real people:

1. most individual transactors treat the prices of all goods and services

that they buy or sell, as independent of the quantities that

they transact;

2. the prices at which individuals currently agree to transact are

market clearing prices that are consistent with optimization by all

decision makers;

3. information bearing on prices and qualities of all things bought

and sold, present and future, is acquired in the quantity that

makes its marginal cost equal to its price; i.e., information is

treated like any other commodity;

4. neither monopoly nor governmental action (through taxation or

otherwise) affects relative prices or quantities sufficiently to prevent

either marginal products or compensation of identical

resources from being approximately equal in all uses.

Such assumptions are viewed not as absolutely true, but as "close enough" approximations to reality that the), can be assumed to be true for the purposes of empirical work.(22) As a result, a great deal of Chicago industrial organization research has focused on demonstrating that the real world does indeed behave as if these assumptions were true. "Chicago concedes that monopoly is possible," Reder notes, "but contends that its presence is much more often alleged than confirmed. . . . When alleged monopolies are genuine, they are usually transitory, with freedom of entry working to eliminate their influence on prices and quantities within a fairly short time period."(23)

Chicago and rivalry

Side by side with the view that the red world, properly understood, is pretty much like perfect competition, one can find analysis of competition in the real world as a rivalrous process. Demsetz' work on firm size and barriers to entry provides a classic case in point. In his 1973 article on industrial concentration, Demsetz painted a clear picture of competition as continuous rivalry among firms:

Superior performance can be attributed to the combination of great

uncertainty plus luck of atypical insight by the management of a firm.

It is not until the experiments are actually tried that we learn which

succeed and which fail. . . . Even though the profits that arise from a

firm's activities may be eroded by competitive imitation, since information

is costly to obtain and techniques are difficult to duplicate, the

firm may enjoy growth and a superior rate of return for some time.(24)

Similarly, Demsetz' 1982 article on barriers to entry chides economists for regarding "the cost of producing the physical output of an existing Arm or industry" as the only "real" cost the firm faces. He contends that several other costs, such as those which "must be incurred to create and maintain a good reputation" and "to bear the risks of innovation," have been ignored.(25) Clearly, such costs are an obvious feature of the competitive process, but they have little justification in the world described by the perfectly competitive model.

Many Chicago theorists attempt to reconcile the two views of competition by postulating a tradeoff between two different types of economic efficiency. Bork enunciates this approach most cogently. He believes that allocative efficiency, as defined by the perfectly competitive model, is an important policy goal. However, he also asserts that "A determined attempt to remake the American economy into a replica of the textbook model of competition would have roughly the same effect on national wealth as several dozen strategically placed nuclear explosions."(26) Bork uses the term "productive efficiency" to describe the type of efficiency that results when firms introduce new products, integrate more effectively so as to reduce costs, gather and disseminate information, and so forth--in short, when firms deal successfully with uncertainty and reduce transactions costs. He recognizes that these two types of efficiency may conflict; a firm may gain market power by producing a better product at a lower cost. As a result, Bork upholds the Williamson tradeoff as a symbol of the type of analysis one should conduct to determine whether a firm's conduct maximizes consumer welfare.(27)

The Williamson tradeoff model seeks to take into account both allocative efficiency and productive efficiency. The purpose of the tradeoff is to analyze business practices, such as horizontal mergers, which both reduce costs and create market power. Increased concentration in an industry--a structural attribute--is assumed to lead to anticompetitive conduct and performance, but it is assumed to shift cost curves downward as well. If the aggregate amount by which a merger reduces costs is greater than the amount of the deadweight (allocative efficiency) loss, the merger is judged to be efficient on balance. If deadweight loss exceeds reduced cost, the merger is inefficient.

The analysis need not apply just to mergers. Demsetz applies similar reasoning to dominant firms:

Successful firms thus would seem to be more closely related to the

"superior land" of classical economic rent analysis than to the single

firm of natural monopoly theory. Whether or not superiority is

reflected in scale economies, deconcentration may have the total effect

of promoting inefficiency even though it also may reduce some

monopoly-caused inefficiencies.(28)

Bork does not expect courts to econometrically estimate cost curves before they render decisions in antitrust cases. He suggests that the cost savings represented in Williamson's diagram are only one form of increased efficiency. Hence, the area between the cost curves only symbolizes efficiency gains. It does not measure them.(29)

Price theory, and only price theory, Bork avers, makes possible identification of those activities that increase consumer welfare.(30) His use of Chicago-style price theory shows that many currently illegal activities, such as several types of vertical restraints, involve no threat of allocative efficiency loss as long as (interbrand) competition is present, and it suggests that others that involve allocative efficiency losses nevertheless increase consumer welfare on net. Bork offers a series of recommendations that seem to be based on the following principles: Any elimination of rivalry ancillary to integration of economic activity that enhances productive efficiency should be per se legal. If the gain in productive efficiency does not outweigh the loss in allocative efficiency, rivalrous competition can, over time, be relied upon to erode entry barriers and to eliminate the inefficient behavior.

In Bork's view, the only role left for antitrust is prevention of mergers that would result in very high concentration, prosecution of nonancillary price-fixing and market division, and elimination of narrowly defined predatory behavior--principally use of the courts and regulatory bodies as a weapon against one's competitors.(31) Similarly, Demsetz warns against industrial deconcentration as a policy goal because a firm's short-term monopoly power may simply be a product of entrepreneurial effort. At the same time, he suggests that there is "less danger to progress" if the law penalizes collusion.(32) Such reasoning leads to Shepherd's Efficiency School Hypothesis 2: "Collusion is the Sole Form of Monopoly Power."(33)

Trouble in Chicagoland

Whether or not one agrees with such reasoning, it seems strange that Bork and like-minded theorists are unwilling to give price-fixing and large mergers the same benefit of the doubt they give virtually all other business practices that are potentially restrictive but also potentially productive. Bork could argue that, as an empirical matter, the few practices he would retain as antitrust violations are quite unlikely to enhance productive efficiency. He does not, though, and for good reason--if he were to do so for one practice, he would have to open up for empirical investigation many of the others that he justifies on strictly theoretical grounds. In other words, he would find himself back in the Williamson tradeoff measurement morass he seeks to avoid.

In cases where theory shows that allocative and productive efficiency conflict, Bork's normative positions, such as strictures against "large" mergers, are arbitrary. He could just as well argue against "medium" or even "small" mergers by asserting either that the efficiency gains from such mergers are likely to be small or that antitrust can offer society relief from inefficient mergers more quickly than can competition. Or he could maintain that the salutary effects of rivalrous competition obviate the need for antitrust action against any business behavior, including cartels. Dewey makes precisely the latter criticism: "[I]f Bork had rigorously adhered to the test he lays down for evaluating antitrust rules, he would have gone all the way and repudiated antitrust in its entirety."(34) In short, Bork demonstrates that, at least for some classes of business activities that enhance productive but diminish allocative efficiency, one must rely on "gut feelings" in order to perform Williamson tradeoff assessments in the absence of actual measurement of cost and demand curves.

There's a solid theoretical reason for this primacy of "gut feelings." In many cases, measurement of costs and benefits for a Williamson tradeoff assessment should be avoided even if it were technically possible, because the logic of the tradeoff model is itself inappropriate for the assessment of virtually all of the practices Bork examines. It may be possible to measure the curves, but there is no guarantee that the curves themselves actually represent the relevant opportunity costs.

The tradeoff model attempts to ascertain the net effects of a change in business behavior on consumer welfare, taking into account allocative and productive efficiency. It can offer an accurate economywide (general equilibrium) efficiency assessment only if its cost curves accurately measure opportunity costs. However, observed cost curves accurately represent opportunity costs only if one is willing to adopt Chicago's Tight-Prior Equilibrium approach. As Reder notes, "in applied work, adherents of TP have a strong tendency to assume that, in the absence of sufficient evidence to the contrary, one may treat observed prices and quantities as good approximations to their long-run competitive equilibrium values."(35) Alternatively,

While the acceptance of tight prior justifies many of the positive and

normative conclusions derived from partial equilibrium analysis [i.e.,

the Williamson tradeoff], it also converts the partial into a general

equilibrium for most of the important issues in industrial organization.

The partial equilibrium investigation is actually a sectoral look at one

part of an economy assumed to be in general equilibrium in every

important sense.(36)

The problem with this approach is that most of the phenomena that Bork and other Chicago theorists seek to explain are the result of imperfect information. But imperfect information prevents attainment of a Pareto-optimal general equilibrium. The Williamson tradeoff offers a valid economywide normative assessment only when applied to practices whose existence is not precluded by the rigorous assumptions required for general equilibrium, for only then do cost curves indicate true opportunity costs.(37)

Fink points out the difficulty that the Tight-Prior assumption poses for those who wish to investigate business practices that arise because of imperfect information:

Our point is not simply that the assumption is highly unrealistic, but

that, if we are willing to make it, we are engaging in general competitive

analysis. Of course, in general equilibrium, perfect competition is

the welfare ideal. Thus, if we wish to employ the Williamson trade-off

model, we are back to that ideal which Bork originally rejected

because it was too unrealistic.(38)

The Chicago toolkit seeks to combine two conflicting notions of competition. Perfect information is a prerequisite for perfect competition; imperfect information is a prerequisite for rivalrous competition. Bork's analysis of business practices in an imperfect information world is compatible with market rivalry analysis, while his attempt to combine allocative and productive efficiency is not

Incomplete knowledge, uncertainty, judgement, experiment, success

and failure, spreading of information, reliance on individualized

knowledge for decisions--these are all characteristic of economic

theory in the tradition of Knight, Hayek, Shackle, Simon, and others.

It is these elements of Bork's analysis that fit in well with market process

analysis, but not with equilibrium [i.e., general competitive equilibrium]



Since the Chicago view tries to blend contradictory notions of competition, it should come as no surprise that it has failed to produce a logically consistent theory of economic efficiency. Shepherd performed the task of identifying the logical inconsistencies, but he did not explicitly examine the underlying reasons for their existence. The inconsistencies result from Chicago theorists' attempts to mix two incompatible notions of competition, both of which have a long lineage in the history of economic thought

Given the source of the Chicago contradictions, at least three interesting research questions emerge:

1. Why did economists shift from defining competition as rivalry to defining it as perfect competition? Gable and High provide an anthology of articles that document these conflicting themes.(40) DiLorenzo and High trace the effects of this change on economists' attitudes toward antitrust laws, and they speculate that the rise of formal, general equilibrium theory in the 1920's crowded out the interpretation of competition as rivalry.(41) However, much work remains to be done.

2. How did Chicago scholars, who praise the virtues of parsimonious price theory, manage to mix two incompatible theories of competition? A clue might be found in Frank Knight's Risk, Uncertainty, and Profit. In parts 1 and 2 of that book, Knight outlines the theory of perfect competition; in part 3, he introduces uncertainty as a motivation for rivalry and entrepreneurship. Given the tremendous influence Knight wielded over subsequent Chicago scholars, perhaps this mixture of two notions of competition is not as surprising as it seems.

3. Is it possible to pursue meaningful empirical research, and derive a meaningful efficiency standard, from theories that define competition as a rivalrous process? Several recent studies have attempted to apply theories of market rivalry to empirical issues.(42) The market rivalry school's record on formulating an efficiency standard is not as good. Many theorists in this tradition explicitly or implicitly rely on ethics or jurisprudence, rather than economics, to provide a definition of monopoly, and hence efficiency.(43)

These types of questions, crucial as they may be to industrial organization's past and future, will have to remain topics for another day. But untwisting the two Chicago strands provides a first step toward answering them.

(1) Y. Brozen, Concentration, Mergers, and Public Policy xxi-ii (1982). (2) For a firsthand account of the effects of this change at the Federal Trade Commission, see J.C. Miller III, The Economist as Reformer (1989). (3) Posners, The Chicago School of Antitrust Analysis, 127 U. Pa. L. Rev. 933-34 (1979). (4) Shepherd, Three "Efficiency School" Hypotheses About Market Power, 33 Antitrust Bull. 398 (1988). (5) Id. at 400 & 409. For a similar characterization of the Chicago position as an empirical generalization, see Gilbert, The Role of Potential Competition in Industrial Organization, 3 J. Econ. Pers. 112 (1989). (6) McNulty, Economic Theory and the Meaning of Competition, 83 Q. J. Econ. 639 (1968), and A Note on the History of Perfect Competition, 75 J. Pol. Econ. 395 (1967). (7) Shepherd, supra note 4, at 399. (8) DiLorenzo & High, Antitrust and Competition, Historically Considered, 26 Econ. Inquiry 431 (1988). (9) F. Hayek, Individualism and Economic Order 101 (1948). See also I. Kirzner, Discovery and The Capitalist Process (1985) and Competition and Entrepreneurship (1973). (10) J. Schumpeter, Capitalism, Socialism, and Democracy 84 (1942). (11) L. Von Mised, Human Action 252 (3d rev. ed. 1966). See also chapter 8 of F. Knight, Risk, Uncertainty, and Profit (1971). Shepherd, supra note 4, at 396-97, chides the "new Chicago" school for "amnesia" about older Chicago scholars' antipathy toward monopoly. "Market rivalry" theorists would chide "new Chicago" theorists for ignoring the second half of Risk, Uncertainty, and Profit. (12) F. Hayek, supra note 9, at 38. (13) See G. O'Driscoll & M. Fizzo, The Economics of Time and Ignorance 45-48 (1985). See also chapter 1 of C. Menger, Principles of Economics (1976). (14) G. O'Driscoll & M. Rizzo, supra note 13, at 72-74. (15) For a small sampling, see Alchian & Demsetz, Production, Information Costs, and Economic Organization, 62 Am. Econ. Rev. 777 (Dec. 1972); Coase, The Nature of the Firm, 56 Economica 386 (Nov. 1937); Cheung, The Contractual Nature of the Firm, 26 J. L. & Econ. (April 1983); Klein, Crawford & Alchian, Vertical Integration, Appropriable Rents, and the Competitive Contracting Process, 21 J. L. & Econ. 297 (Oct. 1978); Klein & Leffler, The Role of Market Forces in Assuring Contractual Performance, 89 J. Pol. Econ. 615 (Aug. 1981); Richardson, Equilibrium, Expectations, and Economics, 69 Econ. J. 223 (1959); Richardson, The Organization of Industry, 82 Econ. J. 883 (Sept. 1972); O. Williamson, The Economic Institutions of Capitalism (1985); and F. Hayek, supra note 9. (16) O. Williamson, supra note 15, at 47. (17) F. Hayek, supra note 9, at 80. (18) Johnson, Can Economic Analysis Give Better Guidance to Antitrust Policy? 21 Econ. Inquiry 4 (1983); Richardson (1959), supra note 15, at 229. (19) Johnson, supra note 18, at 4. (20) F. Scherer, Industrial Market Structure and Economic Performance 11 (1980). (21) Reder, Chicago Economics: Permanence and Change, 20 J. Econ. Lit. 1 (1982). (22) Id. at 11. (23) Id. at 15. (24) Demsetz, Industry Structure, Market Rivalry, and Public Policy, 16 J. L. & Econ. 1 (1973). (25) Demsetz, Barriers to Entry, 72 Am. Econ. Rev. 47 (1982). (26) R. Bork, The Antitrust Paradox 92 (1978). (27) See Williamson, Economies as an Antitrust Defense: The Welfare Tradeoffs, 58 Am. Econ. Rev. 18 (1968). (28) Demsetz, supra note 24, at 4. (29) R. Bork, supra note 26, at 108-9. (30) Id. at 90. (31) Bork argues that, if there are indeed high barriers to entry to begin with, a price-fixing cartel or large merger that creates no productive efficiency may persist for a long time even if it creates no additional barriers. He suggests that it is probably quicker to eliminate the allocative efficiency loss through the law than through competition. The law has the additional advantage that it punishes and hence deters others from engaging in illegal behavior. See Bork, Economics and Antitrust: A Reply, 3 Contemp. Pol. Issues 35 (Winter 1984-85). Large market share achieved by internal growth or a merger more than 10 years old, though, is not a proper target for the law, "for the maintenance of she against We eroding forces of the market over a long period of time also indicates either an absence of restriction of output or superior efficiency, or both." See R. Bork, Supra note 26, at 197. For a similar view, see Demsetz, Economics as a Guide to Antitrust Regulation, 19 J. L. & Econ. 371 (1976). (32) Demsetz, supra note 24, at 3. (33) Shepherd, supra note 4, at 410. (34) Dewey, What Price Theory Can--and Cannot--Do for Antitrust, 3 Contemp. Pol. Issues 3-4 (Winter 1984-85). See also Dewey, Information, Entry and Welfare: The Case for Collusion, 69 Am. Econ. Rev. 587 (1979). (35) Reder, supra note 21, at 12. (36) R. Fink, Partial Equilibrium and the Analysis of Resale Price Maintenance (Center for the Study of Market Processes Working Paper, No. 13, 1983). (37) Compare Shepherd, supra note 4, at 407-10. (38) Fink, General and Partial Equilibrium Theory in Bork's Antitrust Analysis, 3 Contemp. Pol. Issues 16 (Winter 1984-85). Williamson himself admitted, in his original formulation of the tradeoff model, that it is a partial equilibrium construct. "By isolating one sector from the rest of the economy it fails to examine interactions between sectors." O. Williamson, Supra note 15, at 31. He used the model to evaluate a merger that created market power along with economies of scale. Technological economies of scale and scope, of course, need not imply that agents lack perfect information, so the Williamson tradeoff may retain its usefulness when economies of scale and scope require second-best assessments. However, it may over- or underestimate the net efficiency of an action if that action is prompted by imperfect information. (39) Fink, supra note 38, at 17. (40) W. Gable & J. High, 100 Years of the Sherman Act: A Century of Economic Opinion (1992). (41) DiLorenzo & High, supra note 8, at 430. (42) High & Coppin, Wiley and the Whiskey Industry: Strategic Behavior in the Passage of the Pure Food Act, 62 Bus. Hist. Rev. 286 (Summer 1988); Horwitz, Competitive Currencies, Legal Restrictions, and the Origins of the Fed: Some Evidence from the Panic of 1907, 56 S. Econ. J. 639 (January 1990); P. Boettke, The Political Economy of Soviet Socialism 1918-1928 (1990); D. Prychitko, The Political Economy of Worker's Self-Management: A Market Process Critique (forthcoming); R. Fink, Resale Price Maintenance: A Market Process Approach, Ph.D. Dissertation, New York University (1988); W. Gable, Cooperative Marketing Agreements, Agricultural Marketing Orders, and the Market for California Citrus Fruit, Ph.D. Dissertation, George Mason University (1987); D. Walker, Horizontal Territorial Restrictions, Resale Price Maintenance, and the Theory of the Firm: The Sealy Mattress Case, Ph.D. Dissertation, George Mason University (1987). (43) High, Bork's Paradox: Static vs. Dynamic Efficiency in Antitrust Analysis, 3 Contemp. Pol. Issues 23 (Winter 1984-85); D. J. Armentano, Antitrust and Monopoly: Anatomy of a Policy Failure (1982); M. N. Rothbard, Man, Economy, and State (1970). John Carter, whom Shepherd classifies with the "new Chicago" rather than the "market rivalry" school, has similarly called for a "meta-debate" over broad legal rules in place of traditional industrial organization analysis. See Carter, Concentration Change and the Structure-Performance Debate: An Interpretive Essay, 5 Managerial & Decision Econ. 204 (1984).

JEROME ELLIG Assistant Professor of Economics, Center for the Study of Market Processes, George Mason University, Fairfax, VA.

AUTHOR'S NOTE: I am indebted to Don Boudreaux, Tyler Cowen, Jack High, Robert Pitofsky, Charles Rowley, Larry White, an anonymous referee, and especially, Richard Fink for discussions, comments, and criticisms incorporated into this article. I would also like to thank Lee Coppock for research assistance and the Earhart Foundation and the Center for the Study of Market Processes for the financial support that made this research possible.
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