Antitrust and the Close Look
Antitrust and the Close Look
Transaction Cost Economics in Competition Policy
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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