Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries / David S. Evans, Richard Schmalensee.

Format:

Book

Author/Creator:

Evans, David S.

Contributor:

National Bureau of Economic Research.

Schmalensee, Richard.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8268.

NBER working paper series no. w8268

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

Competition in many important industries centers on investment in intellectual property. Firms engage in dynamic, Schumpeterian competition for the market, through sequential winner-take-all races to produce drastic innovations, rather than through static price/output competition in the market. Sound antitrust economic analysis of such industries requires explicit consideration of dynamic competition. Most leading firms in these dynamically competitive industries have considerable short-run market power, for instance, but ignoring their vulnerability to drastic innovation may yield misleading conclusions. Similarly, conventional tests for predation cannot discriminate between practices that increase or decrease consumer welfare in winner-take-all industries. Finally, innovation in dynamically competitive industries often involves enhancing feature sets; there is no sound economic basis for treating such enhancements as per se illegal ties.

Notes:

Print version record

May 2001.