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The Global Limits of Competition Law$
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D. Daniel Sokol and Ioannis Lianos

Print publication date: 2012

Print ISBN-13: 9780804774901

Published to Stanford Scholarship Online: June 2013

DOI: 10.11126/stanford/9780804774901.001.0001

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Antitrust and the Close Look

Antitrust and the Close Look

Transaction Cost Economics in Competition Policy

(p.66) 5 Antitrust and the Close Look
The Global Limits of Competition Law

Herbert Hovenkamp

Stanford University Press

This chapter emphasizes the diversity of economic theory by addressing the role of transaction cost economics (TCE) within antitrust. It identifies one extreme the “structural” school, which saw market structure as the principal determinant of poor economic performance. At the other extreme was the Chicago School, which also saw the economic landscape in terms of competition and monopoly, but found monopoly only infrequently and denied that a monopolist could “leverage” its power into related markets. It is argued that TCE has served to limit antitrust analysis from the structuralist expansionism of the 1970s and earlier, but also as a corrective for those inclined to see the movement of resources as essentially costless. Both are extremes that antitrust policy should avoid.

Keywords:   economic theory, transaction cost economics, structuralism, Chicago School, antitrust policy, competition, monopoly

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