Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust

24 Pages Posted: 11 Mar 2008

See all articles by Albert Foer

Albert Foer

American Antitrust Institute (AAI)

Date Written: November 30, 2006

Abstract

Wal-Mart, the largest of power buyers, represents a paradox. From one perspective it is exactly the type of company we want our economy to produce. On the other hand, from several different perspectives, it represents a danger to be condemned. What can we say about the Wal-Mart phenomenon from the perspective of antitrust? This paper sifts through the criticisms and holds them up against the standard of antitrust, with particular attention to predation, monopsony, great bargaining power that is less than monopsonistic, and price discrimination. Special attention is given to the so-called waterbed effect. The paper asks whether antitrust, which developed when manufacturers were king, is up to the challenge of the power buyer in an increasingly retailer-driven marketplace. An appendix provides a set of questions that need to be answered.

Keywords: antitrust, power buyer, monopsony, price discrimination, waterbed effect, bargaining power, retailing, goals, choice

Suggested Citation

Foer, Albert, Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust (November 30, 2006). American Antitrust Institute Working Paper No. 06-07. Available at SSRN: https://ssrn.com/abstract=1103609 or http://dx.doi.org/10.2139/ssrn.1103609

Albert Foer (Contact Author)

American Antitrust Institute (AAI) ( email )

1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20008-1022
United States

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