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Do Expert Agencies Outperform Generalist Judges? Some Preliminary Evidence from the Federal Trade Commission

Journal of Antitrust Enforcement, December 2012, pp. 1-22

George Mason Law & Economics Research Paper No. 13-03

23 Pages Posted: 25 Jan 2012 Last revised: 19 Mar 2013

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Angela Diveley

Weil, Gotshal & Manges LLP

Date Written: January 23, 2012

Abstract

In the context of US antitrust law, many commentators have recently called for an expansion of the Federal Trade Commission’s (FTC’s) adjudicatory decision-making authority pursuant to Section 5 of the FTC Act, increased rulemaking, and carving out exceptions for the agency from increased burdens of production facing private plaintiffs. These claims are often expressly grounded in the assertion that expert agencies generate higher quality decisions than federal district court judges. We call this assertion the expertise hypothesis and attempt to test it. The relevant question is whether the expert inputs available to generalist federal district court judges translate to higher quality outputs and better performance than the Commission produces in its role as an adjudicatory decision-maker. While many appear to assume agencies have courts beat on this margin, to our knowledge, this oft-cited reason to increase the discretion of agencies and the deference afforded them by reviewing courts is void of empirical support. Contrary to the expertise hypothesis, we find evidence suggesting the Commission does not perform as well as generalist judges in its adjudicatory antitrust decision-making role. Furthermore, while the available evidence is more limited, there is no clear evidence the Commission adds significant incremental value to the administrative law judge decisions it reviews. In light of these findings, we conclude there is little empirical basis for the various proposals to expand agency authority and deference to agency decisions. More generally, our results highlight the need for research on the relationship between institutional design and agency expertise in the antitrust context.

Keywords: adjudicative, Article III, Brazil, Bureau of Economics, center, China, Clayton, competition, European Union, Gene Brewer, Gwendolyn Bell, India, Jay Kesan, Jonathan Nash, Michael Baye, price fixing, Rafael Pardo, reversal rate, Richard Posner, Robinson-Patman, Section 5, Sherman Act, William Kovac

JEL Classification: K21, K23, L40, L51

Suggested Citation

Wright, Joshua D. and Diveley, Angela, Do Expert Agencies Outperform Generalist Judges? Some Preliminary Evidence from the Federal Trade Commission (January 23, 2012). Journal of Antitrust Enforcement, December 2012, pp. 1-22 ; George Mason Law & Economics Research Paper No. 13-03. Available at SSRN: https://ssrn.com/abstract=1990034 or http://dx.doi.org/10.2139/ssrn.1990034

Joshua D. Wright (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

Angela Diveley

Weil, Gotshal & Manges LLP ( email )

Washington, DC
United States

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