In this issue:
CPI’s Spring 2010 issue takes a comprehensive look at behavioral economics. Behavioral economics is still controversial and its implications for public policy are just now being fully explored. The articles in this issue make a substantial contribution in assessing where, if anywhere, behavioral economics is relevant to antitrust and the increasingly related field of consumer protection.
In addition, Einer Elhauge responds to his critics from our previous issue, maintaining that the Chicago single monopoly profit theorem really is dead. And we continue our practice of presenting recent cases of special interest with an analysis of Barclays’ successful appeal of the Competition Commission’s judgment regarding personal protection insurance. Our final article brings us back full circle to the beginnings of behavioral economics with a reprint of Herbert Simon’s seminal paper on bounded rationality. Enjoy!
From the Editor
CPI’s Spring 2010 issue takes a comprehensive look at behavioral economics and its implications, if any, for the practice of competition policy.
David S. Evans, University of Chicago & University College London
A Symposium on Antitrust and Behavioral Economics
Discussing the literatures on behavioral economics, bounded rationality, and experimental economics as they apply to firm behavior in markets.
Mark Armstrong & Steffen Huck, University College London
In this article we present some of the reasons why markets with advice may malfunction, and explore the potential rationales for some of the policy proposals that are on the table.
Roman Inderst, University of Frankfurt and Imperial College London & Marco Ottaviani, Kellogg School of Management, Northwestern University
In this article, I will provide some background on behavioral economics and assess what insights it provides for consumer protection and antitrust policy.
Michael Salinger, Boston University
The Jevons Colloquium: Behavioral Economics in Consumer Protection and Competition Law
Does the courts present embrace of price theory in antitrust cases portend the courts imminent acceptance of behavioral economics in either antitrust or consumer protection cases?
Douglas H. Ginsburg, U.S. Court of Appeals for the DC Circuit; Derek W. Moore, Cadwalader, Wickersham & Taft, LLP.
What courts have been doing all along may be closer to behavioral economics than to more conventional economic theories of rational behavior.
Vivien Rose, U.K. Competition Appeal Tribunal
The existence of behavioral biases does have a number of implications for the way in which markets work.
Matthew Bennett, John Fingleton, Amelia Fletcher, Liz Hurley, & David Ruck, U.K. Office of Fair Trading
When looking at the implications of behavioral economics for merger analysis there are some intriguing possibilities, some of which have already begun to have a modest impact.
Alison Oldale, U.K. Competition Commission
In a model of rational behavior, firms in a competitive environment compete mostly on the merits and the market outcome is efficient and welfare- maximizing. Does this result continue to hold when the rationality assumption about consumer behavior is relaxed?
Eliana GarcÃ©s, Cabinet, European Commission
Riposte: Answering the Commentary on Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory
Presenting what we need to reject not only the single monopoly profit theory but also a categorical rule of per se legality for either all ties or all ties without a substantial foreclosure share.
Einer Elhauge, Harvard Law School
Notable Antitrust Cases
There are a number of circumstances where general principles of judicial review allow heightened scrutiny in competition inquiries.
Antonio Bavasso and Mark Friend, Allen & Overy
This article by Herbert Simon provided one of the leading alternatives to the traditional model of rational profit-maximizing behavior, bringing to the forefront of academic attention several of the key issues on which behavioral economics would eventually focus. Introduction by Lindsay McSweeney, Competition Policy International.
Cecilia Chaing, Lindsay McSweeney, Apr 01, 2010