ECON 308 Chapter Notes -Deadweight Loss, Market Power, Clorox
19 Apr 2013
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Williamson: economies as an antitrust defense- the welfare tradeoffs. If they can"t, then a rational treatment of the merger question requires that an effort be made to establish the allocative implications of the scale economy and market power effects associated with the merger. The court took the position in brown shoe that not only were efficiencies no defense, but a showing that a merger resulted in efficiencies could be used affirmatively in attacking the merger since small rivals could be disadvantaged. In a concurring opinion to the clorox (procter and gamble case) decision, justice. Harlan provides the first hint that efficiencies may deserve greater standing. It is clear that economies would be an acceptable antitrust defense for only a restricted set of structural conditions. To disallow trade-offs altogether merely reflects a particularly severe a priori judgement as to net benefits. Trade-off analysis is designed to cope with these kinds of issues.
