Decision Theory and Antitrust Rules
Posted: 13 Nov 1998
There is ongoing controversy over the proper antitrust decision process that regulatory commissions and the courts should use to evaluate various restraints. This controversy entails the question of whether to analyze conduct under a per se rule, the classical rule of reason, the quick look, the inherently suspect standard, or some other truncated rule of reason standard. This article applies decision theory to this issue of standards formulation. Decision theory sets out a process for making factual determinations and decisions when information is costly and therefore imperfect. The paper is a methodology for determining when to make decisions on the basis of current information, and when to gather and consider further information before making a decision. It then applies that methodology to the formulation of antitrust standards.
JEL Classification: K21, L4, D7
Suggested Citation: Suggested Citation