The Failed Resurrection of the Single Monopoly Profit Theory

Einer Elhauge, Apr 01, 2010

Professor Paul Seabright claims that an absence of empirical proof supports the single monopoly profit theory. This claim fails because the single monopoly profit theory is an impossibility theorem. It also fails because my recommended exception applies to whatever empirical extent the necessary conditions for the single monopoly profit theory actually exist.
Seabright likewise claims that a lack of empirical proof favors critics of current tying doctrine. This claim fails because it is the critics that favor a categorical rule that requires empirical proof across the category: namely critics favor cate- gorical legality either for all ties or for all ties that lack substantial foreclosure. In contrast, current tying doctrine uses no categorical rule, but rather weighs efficiencies against anticompetitive effects in each case and permits ties to whatever extent it turns out to be empirically true that the efficiencies outweigh the anticompetitive effects. Current tying doctrine is thus preferable to the critics’ recommended alternatives whether the standard is consumer welfare or total welfare, and whether one thinks most ties flunk that standard or not.

 

Seabright also makes the more minor claim that, absent empirical proof that most ties harm welfare, the law should shift the burden of proof on efficiencies away from defendants. But this claim fails for four reasons. First, the burden of empirical proof on legal issues is

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