Is Complexity in Antitrust a Virtue? The Accuracy-Simplicity Tradeoff

Abstract

With the increasing technical sophistication in economic theory and econometric estimation, antitrust assessments have become increasingly complex. Calls to incorporate additional considerations such as business strategy, managerial acumen, externalities, and consumer error would add to this complexity. Such technical advancements and added dimensions to assessments come at a cost. Business managers require expensive legal and economic consultation to ascertain if a proposed practice, merger, or venture may violate the antitrust laws. Judges and juries face similar difficulties in determining liability. The pendulum perhaps should shift back toward simplicity. Simplicity is consistent with different views regarding strict or loose concentration standards, the role of intent, or criteria for per se legality or illegality of various practices. Recognizing simplicity may reopen historical debates over whether economic welfare or other considerations—political power, the right to ply one's trade, the “competitive process” —should define the objectives of a more easily comprehended antitrust law.