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The Implications of Behavioral Antitrust

47 Pages Posted: 17 Jul 2012 Last revised: 7 Aug 2012

Maurice E. Stucke

University of Tennessee College of Law; The Konkurrenz Group

Date Written: July 16, 2012

Abstract

Behavioral economics is now mainstream. It is also timely. The financial crisis raised important issues of market failure, weak regulation, moral hazard, and our lack of understanding about how many markets actually operate.

As behavioral economics (with its more realistic assumptions of human behavior) goes mainstream in academia and the business world, one expects lawyers and economists to bring the current economic thinking to the competition agencies. How should the competition agencies respond?

This paper examines how competition authorities can consider the implications of behavioral economics on four levels: first as a gap filler, i.e., to help explain “real world” evidence that neoclassical economic theory cannot explain; second to assess critically the assumptions of specific antitrust policies, such as merger review and cartel prosecutions; third to revisit three fundamental antitrust questions, namely what is competition, what are the goals of competition law, and what should be the legal standards to promote those goals; and fourth, to assess how behavioral economics will affect the degree of convergence/divergence of competition law among the over 100 jurisdictions with competition laws today.

Keywords: Behavioral economics, antitrust, competition, cartels, mergers

JEL Classification: K21, L40, L41, L49

Suggested Citation

Stucke, Maurice E., The Implications of Behavioral Antitrust (July 16, 2012). University of Tennessee Legal Studies Research Paper No. 192. Available at SSRN: https://ssrn.com/abstract=2109713 or http://dx.doi.org/10.2139/ssrn.2109713

Maurice E. Stucke (Contact Author)

University of Tennessee College of Law ( email )

1505 W. Cumberland Ave.
Knoxville, TN 37996
United States
865-974-9816 (Phone)

HOME PAGE: http://law.utk.edu/people/maurice-stucke/

The Konkurrenz Group ( email )

5335 Wisconsin Ave., NW
Suite 440
Washington, DC 20015
United States

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