The Firm in Economics and Antitrust Law

ISSUES IN COMPETITION LAW AND POLICY, Vol. 1, pp. 249-272, W. Collins, ed., American Bar Association Section, 2008

24 Pages Posted: 9 Jul 2011

See all articles by Andres V. Lerner

Andres V. Lerner

Compass Lexecon

Benjamin Klein

University of California, Los Angeles (UCLA) - Department of Economics; Compass Lexecon

Date Written: 2008

Abstract

Economic theories of the firm are categorized into two types of theories – those that emphasize the role of the firm in mitigating holdup problems by firm ownership of residual control rights and those that emphasize the role of the firm in mitigating incentive problems by firm ownership of residual profit rights. The economic definition of the firm that corresponds most closely with legal and common usage focuses on the ownership of residual control rights achieved through integration. This economic definition of the firm is fully consistent with the legal principles set forth in Copperweld but is inconsistent with the “unity of interests” criterion sometimes used in antitrust law.

JEL Classification: L20, K21

Suggested Citation

Lerner, Andres V. and Klein, Benjamin, The Firm in Economics and Antitrust Law (2008). ISSUES IN COMPETITION LAW AND POLICY, Vol. 1, pp. 249-272, W. Collins, ed., American Bar Association Section, 2008. Available at SSRN: https://ssrn.com/abstract=1657203

Andres V. Lerner

Compass Lexecon ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-6028
United States
310-728-2026 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.compasslexecon.com/professionals/pages/bio.aspx?ID=155

Benjamin Klein (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.econ.ucla.edu/people/Faculty/Klein.html

Compass Lexecon ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.compasslexecon.com/professionals/bio?id=152

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