Is Competition Always Good?
Maurice E. Stucke
University of Tennessee College of Law; The Konkurrenz Group
October 4, 2012
Journal of Antitrust Enforcement (Forthcoming)
University of Tennessee Legal Studies Research Paper No. 203
Competition is the backbone of U.S. economic policy. The U.S. Supreme Court observed, “The heart of our national economic policy long has been faith in the value of competition.” Competition advocacy is also thriving internationally. Promoting competition is broadly accepted as the best available tool for promoting consumer well-being. Competition officials, who regularly try to protect the public from anticompetitive special interest legislation, are justifiably jaded about complaints of excess competition. Although the economic crisis has prompted some policymakers to reconsider basic assumptions, the virtues of competition are not among them.
Nonetheless to effectively advocate competition, officials must understand when competition itself is the problem's cause, not its cure. Market competition, while harming some participants, often benefits society. But does competition always benefit society? This is antitrust’s blind spot. After outlining the virtues of competition, and discussing some well-accepted exceptions to competition law, this Article addresses four scenarios where competition yields a suboptimal result.
Number of Pages in PDF File: 51
Keywords: Competition, Antitrust, Behavioral Economics, Competition Advocacy
JEL Classification: D62, L40, L43, D43
Date posted: October 4, 2012 ; Last revised: October 30, 2012