Economies of Scope: Economics for Lawyers

Abstract

The purpose of this paper is to give an insight into economies of scope – one of the basic types of efficiency gains. These economies belong to the main types of efficiency gains, which as such should occur in antitrust decisions. Yet, there are no legal nor economic papers presenting the basic economics underlying this fundamental type of efficiency gains in a way that is accessible to lawyers and the general public. The definition and occurrence of economies of scope are studied in this paper. The main value of this paper is to contribute to the legal conceptualization of economies of scope: it provides guidance on the nature and applications of economies of scope for the purpose of legal doctrine and court work on antitrust cases. More research on economies of scope is necessary in economics to better conceptualize economies of scope in law. Theoretical and practical conclusions should be drawn in economic research across various industries.

Keywords: economies of scope, conglomerates