The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other
Joshua D. Wright
Federal Trade Commission; George Mason University School of Law
May 31, 2012
Yale Law Journal, Forthcoming
George Mason Law & Economics Research Paper No. 12-45
The potential complementarities between antitrust and consumer protection law — collectively, “consumer law”— are well known. The rise of the newly established Consumer Financial Protection Bureau (CFPB) portends a deep rift in the intellectual infrastructure of consumer law that threatens the consumer-welfare oriented development of both bodies of law. This Feature describes the emerging paradox that rift has created: a body of consumer law at war with itself. The CFPB’s behavioral approach to consumer protection rejects revealed preference — the core economic link between consumer choice and economic welfare and the fundamental building block of the rational choice approach underlying antitrust law. This Feature analyzes the economic, legal, and political institutions underlying the potential rise of an incoherent consumer law and concludes that, unfortunately, there are several reasons to believe the intellectual rift shaping the development of antitrust and consumer protection will continue for some time.
Number of Pages in PDF File: 54
Keywords: above-cost discounting, abusive, act, comparative institutional analysis, credit cards, deceptive, disclosure, Dodd-Frank, economics, Elizabeth Warren, FTC, FTCA, Federal Trade Commission, market failures, Oren Bar-Gill, price theory, product bundling, Richard Cordray, Robert Bork, unfair practices
JEL Classification: D11, D12, D18, K21, K22, K23, L40, L41, L42, L43, L44Accepted Paper Series
Date posted: May 31, 2012
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