Economics in Merger Analysis

Abstract

Economists have had success in describing a coherent—if not always accurate—framework for analyzing antitrust issues using price theory. This framework borrows heavily from neoclassical assumptions. Post—Chicago school analysis just expands conduct based on price theory to include some predatory conduct. Now it is time to look at nonprice considerations. The 2006 Merger Commentary explored this subject in some detail. The 2010 Horizontal Merger Guidelines went further—but not far enough in the author's estimation. They do not incorporate the learning associated with behavioral economics, for example. The FTC is the ideal institution for exploring this subject since it has both a Consumer Protection Bureau and a Competition Bureau.