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Should Competition Law Promote Efficiency? Some Reflections of an Economist on the Normative Foundations of Competition Law

ECONOMIC THEORY AND COMPETITION LAW, Josef Drexl, Laurence Idot, and Joel Moneger, eds., Cheltenham: Edward Elgar, 2008

25 Pages Posted: 17 Dec 2007 Last revised: 29 Jan 2008

Wolfgang Kerber

Philipps University Marburg - School of Business & Economics

Date Written: 19.12.2007

Abstract

The discussion on the normative foundations of competition law is not well-developed. Economic efficiency cannot be the final answer to this normative question. There are different concepts of efficiency with their specific problems and deficits. The discussion in economics, which is narrowed down to total welfare standard vs. consumer welfare standard, does not sufficiently grasp the complexity of the normative problems. In the paper the normative key concepts are clarified, which economists use in regard to competition policy - such as static and dynamic efficiency as well as the problem of redistribution through market power. Afterwards an alternative approach is briefly presented, which - based on constitutional economics - allows for a broader normative discussion of the goals of competition law. The decisive difference is that here the preferences (and values) of the citizens of a society are the relevant normative criterion, from which the goals of competition laws should be derived. From that perspective it is argued that it is unlikely that the citizens would agree on a total welfare standard or a pure consumer welfare standard. It might also be possible to defend the protection of certain rights of market participants as a goal of competition law as well as the consideration of notions of fairness, as long as these normative notions reflect widely-held values of the citizens. Most important is that a broader interdisciplinary discussion on the goals of competition law is necessary.

JEL Classification: K21, L40

Suggested Citation

Kerber, Wolfgang, Should Competition Law Promote Efficiency? Some Reflections of an Economist on the Normative Foundations of Competition Law (19.12.2007). ECONOMIC THEORY AND COMPETITION LAW, Josef Drexl, Laurence Idot, and Joel Moneger, eds., Cheltenham: Edward Elgar, 2008. Available at SSRN: https://ssrn.com/abstract=1075265

Wolfgang Kerber (Contact Author)

Philipps University Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany
+49 6421 2823921 (Phone)

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