An Effective and Enforceable Alternative to the Consumer Surplus Standard

37 Pages Posted: 23 Jan 2003

See all articles by Marc Duhamel

Marc Duhamel

Department of Finance and Economics; University of Windsor - Department of Economics

Peter G.C. Townley

Acadia University - Department of Economics; University of Windsor

Multiple version iconThere are 2 versions of this paper

Abstract

We argue that sound merger policy requires an effective and enforceable efficiency defence standard. An effective standard yields decisions that serve the social objectives of competition policy. This requires minimization of the expected social cost of making Type I and II errors. An enforceable standard yields decisions at reasonable cost to the antitrust authorities and the merging firms. Support exists for alternatives to the current situation including the Consumer Surplus Standard described in Hillsdown. This standard does not meet our criteria for sound merger policy. We propose amending Section 92 and deleting Section 96 of the Competition Act, an approach that would yield a provision satisfying our criteria.

Keywords: Merger Policy, Efficiency Defence, Welfare Economics

JEL Classification: L4, D61, D63

Suggested Citation

Duhamel, Marc and Townley, Peter G.C. and Townley, Peter G.C., An Effective and Enforceable Alternative to the Consumer Surplus Standard. A revised version of the paper and abstract has been accepted for publication by Kluwer Law International's World Competition: Law and Economics Review, Vol. 26, No. 1, Sauder School of Business Working Paper No. #, Available at SSRN: https://ssrn.com/abstract=326961 or http://dx.doi.org/10.2139/ssrn.326961

Marc Duhamel (Contact Author)

Department of Finance and Economics ( email )

School of Management
Université du Québec à Trois-Rivières
Trois-Rivières, Québec G9A 5H7
Canada
819-376-5011;3179 (Phone)
819-376-5079 (Fax)

University of Windsor - Department of Economics

Chrysler Hall North
401 Sunset Avenue
Windsor, ON N9B 3P4
Canada

HOME PAGE: http://www.uwindsor.ca/economics

Peter G.C. Townley

University of Windsor ( email )

401 Sunset Avenue
Windsor, Ontario N9B 3P4
Canada
519-253-3000 (Phone)

HOME PAGE: http://www.uwindsor.ca/economics

Acadia University - Department of Economics ( email )

Wolfville B0P 1X0 NS
Canada