Optimal Standards of Proof in Antitrust

22 Pages Posted: 30 Jul 2019 Last revised: 10 Sep 2023

See all articles by Murat C. Mungan

Murat C. Mungan

Texas A&M University School of Law

Joshua D. Wright

Lodestar Law and Economics

Date Written: July 30, 2019

Abstract

Economic analyses of antitrust institutions have thus far focused predominantly on optimal penalties and the design of substantive legal rules, and have largely ignored the standard of proof used in trials as a policy tool in shaping behavior. This neglected tool can play a unique role in the antitrust context, where a given firm may have the choice to engage in exceptional anticompetitive or procompetitive behavior, or simply follow more conventional business practices. The standard of proof used in determining the legality of a firm's conduct affects not only whether the firm chooses to engage in pro versus anticompetitive behavior, but also whether it chooses to remain passive. We introduce a model to investigate the effects of this additional tradeoff on the optimal standard of proof. The nature of these effects depends upon the relationship between the beneficial impact of procompetitive behavior versus the harmful impacts of anticompetitive behavior, since this relationship is what determines the costs associated with Type I and Type II error. Adopting Judge Easterbrook's presumption that preventing procompetitive behavior is more harmful than allowing anticompetitive behavior, we show that the standard of proof facing plaintiffs in antitrust cases ought to be stronger than preponderance of the evidence.

Keywords: Antitrust, standard of proof, deterrence, Easterbrook.

Suggested Citation

Mungan, Murat C. and Wright, Joshua D., Optimal Standards of Proof in Antitrust (July 30, 2019). International Review of Law and Economics, Forthcoming, George Mason Law & Economics Research Paper No. 19-20, Available at SSRN: https://ssrn.com/abstract=3428771 or http://dx.doi.org/10.2139/ssrn.3428771

Murat C. Mungan (Contact Author)

Texas A&M University School of Law

1515 Commerce St.
Fort Worth, TX Tarrant County 76102
United States

Joshua D. Wright

Lodestar Law and Economics ( email )

P.O. Box 751
Mclean, VA 22101
United States

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