Per Se in Itself

Posted by Social Science Research Network

Per Se in Itself

Ramsi Woodcock (Georgia State University)

Abstract:     In recent decades, antitrust courts in the United States, concerned with reducing error costs, have replaced many bans with case-by-case review of conduct for consumer harm under the rule of reason. I identify three ways in which bans are sometimes necessary to minimize error costs, even when they condemn good conduct, as well as bad. Each arises in part because enforcers have constrained budgets. I show that even when a constrained budget is large enough to pay for a rule of reason standard in all areas of antitrust, error costs are lower when bans are retained in some areas. The reason is that bans free up resources that may be invested in more careful rule of reason treatment elsewhere. I show that effective antitrust enforcement budgets in the United States peaked in the 1940s and have fallen in recent decades, creating a budget constraint. I consider the consequences of other recent antitrust rule changes.

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