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Using the 'Consumer Choice' Approach to Antitrust Law

Robert H. Lande

University of Baltimore - School of Law

Neil W. Averitt

Federal Trade Commission

Antitrust Law Journal, Vol. 74, p. 175, 2007

The current paradigms of antitrust law - price and efficiency - do not work well enough. They were an immense improvement over their predecessors, and they have served the field competently for a generation, producing reasonably accurate results in most circumstances. Accu mulated experience has also revealed their shortcomings, however. They are hard to fully understand and are not particularly transparent in their application. Moreover, in a disturbingly large number of circumstances they are unable to handle the important issue of non-price competition.

In this article we suggest replacing the older paradigms with the somewhat broader approach of "consumer choice." The choice framework has several advantages. It takes full account of all the things that are actually important to consumers- price, of course, but also variety, innovation, quality, and other forms of non-price competition. It is also far more transparent, which is an important administrative virtue even where, as in the great majority of cases, it will reach the same result. And in some important real-world situations it will lead to better substantive outcomes. There are a number of variety-valuing industries and circumstances that can be assessed cor rectly only by including an effective analysis of nonprice factors. We identify several of those in the article.

Number of Pages in PDF File: 90

Keywords: antitrust, consumer choice, competition, price

JEL Classification: K21

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Date posted: April 21, 2008 ; Last revised: June 4, 2008

Suggested Citation

Lande, Robert H. and Averitt, Neil W., Using the 'Consumer Choice' Approach to Antitrust Law. Antitrust Law Journal, Vol. 74, p. 175, 2007. Available at SSRN: https://ssrn.com/abstract=1121459

Contact Information

Robert H. Lande
University of Baltimore - School of Law ( email )
1420 N. Charles Street
Baltimore, MD 21218
United States
Neil W. Averitt (Contact Author)
Federal Trade Commission ( email )
600 Pennsylvania Ave., NW
Washington, DC 20580
United States
202-326-2885 (Phone)
HOME PAGE: http://www.ftc.gov
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