Behavioral Economics and Antitrust Law: Hindsight Bias

By Christopher Leslie

Antitrust law often requires judges to place themselves in the position of one of the litigating parties at an earlier time and to make predictions, as of that point in time, about future outcomes. This invites hindsight bias. For example, in attempted monopolization cases, judges often assert that if the defendant did not actually succeed in monopolizing the market, then there was never any likelihood that it ever could have succeeded. This essay explains how hindsight bias has improperly affected antitrust decisions across three areas of antitrust law: attempted monopolization, predatory pricing, and price-fixing conspiracies. This essay explains how hindsight bias effectively amends substantive antitrust doctrine and how courts can reduce the risk of hindsight bias in antitrust litigation.

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