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Over the past twenty years, economic theory has begun to play a central role in antitrust matters. In earlier days, the application of antitrust rules was viewed almost entirely in formal terms; now it is widely accepted that the proper interpretation of these rules requires an understanding of how markets work and how firms can alter their efficient functioning. The Handbook of Antitrust Economics offers scholars, students, administrators, courts, companies, and lawyers the economist's view of the subject, describing the application of newly developed theoretical models and improved empirical methods to antitrust and competition law in both the United States and the European Union. (The book uses the U.S. term "antitrust law" and the European "competition law" interchangeably, emphasizing the commonalities between the two jurisdictions.) After a general discussion of the use of empirical methods in antitrust cases, the Handbook covers mergers, agreements, abuses of dominance (or unilateral conducts), and market features that affect the way firms compete. Chapters examine such topics as analyzing the competitive effects of both horizontal and vertical mergers, detecting and preventing cartels, theoretical and empirical analysis of vertical restraints, state aids, the relationship of competition law to the defense of intellectual property, and the application of antitrust law to "bidding markets," network industries, and two-sided markets.ContributorsMark Armstrong, Jonathan B. Baker, Timothy F. Bresnahan, Paulo Buccirossi, Nicholas Economides, Hans W. Friederiszick, Luke M. Froeb, Richard J. Gilbert, Joseph E. Harrington, Jr., Paul Klemperer, Kai-Uwe Kuhn, Francine Lafontaine, Damien J. Neven, Patrick Rey, Michael H. Riordan, Jean-Charles Rochet, Lars-Hendrick Röller, Margaret Slade, Giancarlo Spagnolo, Jean Tirole, Thibaud Vergé, Vincent Verouden, John Vickers, Gregory J. WerdenPaolo Buccirossi is Director and Founder of Lear, a research center and an economics consulting firm in Rome, and has worked as an economic advisor at the Italian Competition Authority.
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Antitrust is a blunt instrument aimed at the wrong problem. So say the authors of this provocative and contentious book, both of them well-known for providing antitrust support and training in many developing economies and for serving as antitrust experts on behalf of private parties targeted by antitrust authorities. Drawing on their wide experience, they describe how antitrust/ competition rules in developing economies curtails innovation and entrepreneurship under what the U.S. Supreme Court has blasted as the chilling effects of false positives. Moreover, they point out, entrenched interest groups in developing countries quickly discover that soliciting preferential treatment from the state, which leads to state-sponsored non-tariff barriers, is more attractive than private cartelization, not least because it is perfectly legal and thus beyond the reach of antitrust law enforcement efforts. What the authors offer is a thoroughgoing analysis clearly demonstrating that, whatever economic path developing countries pursue, imposing Western-style antitrust regimes will engender uncertainty, chill economic behaviour, and foster an unhealthy climate for business. They employ the influential error-cost methodology to appraise the performance of competition policy and to show how such a policy creates irresolvable tensions in fragile economies with weak institutions--economies characterized by informal rules of business practice, long-standing symbiotic business state relationships, and unpredictable state action. They mount a powerful critique of the arguments of neo-institutionalists (who fail to recognize the vulnerable nature of emerging market economies) and competition advocates (who presume to stand ready and vigilant to enforce competition policy on state entities). But competition policy in developing economies is not an irremediable mistake. Such regimes need not adhere to an inappropriate Western model, the authors maintain, to find cheaper and more effective ways to foster competition. As a detailed and insightful description and framework defining the limits to antitrust in developing (and especially least-developed) countries, this study promises to extend the debate that should precede any consideration of globally extending competition policy in its current version. Crafters of policies and rules in competition law and administration cannot fail to gain in depth of understanding from this new approach to the subject.
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