What is the connection between mainstream economic theory and antitrust regulation?
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What is the connection between mainstream economic theory and antitrust regulation?
Started by Murphy, Sep 10 2005 11:58 AM
2 replies to this topic
#2
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Posted 06 September 2008 - 09:36 AM
The two primarily theories of markets mainstreamers make--pure competition and pure monopoly--assume incoreectly that many firms, homogeneous products, perfect knowlege, "price taking" set by MC=MR, little government interference is the norm. By assuming these criterion, antitrust is obvious. Real competiton: efficiency, rivalry, creative destruction, etc. which may show firms defeating the inefficient firms cannot be allowed due to fewer firms, product differentiation, technology innovations, patents, etc....... The government must "fix" it by punishing success and protecting the failures.
#3
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Posted 18 February 2009 - 12:49 AM
Mart Grams, on Sep 6 2008, 08:36 AM, said:
The two primarily theories of markets mainstreamers make--pure competition and pure monopoly--assume incoreectly that many firms, homogeneous products, perfect knowlege, "price taking" set by MC=MR, little government interference is the norm. By assuming these criterion, antitrust is obvious. Real competiton: efficiency, rivalry, creative destruction, etc. which may show firms defeating the inefficient firms cannot be allowed due to fewer firms, product differentiation, technology innovations, patents, etc....... The government must "fix" it by punishing success and protecting the failures.
Right. More generally, mainstream models start with "given" cost curves, demand functions, etc. And so of course if the planners knew all of that information, then they might try to improve on the market outcome. But in the real world, those data are not available in real time to the planners.
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