Potential Competition and Antitrust Analysis: Monopoly Profits Exceed Duopoly Profits

28 Pages Posted: 5 May 2021

See all articles by Steven C. Salop

Steven C. Salop

Georgetown University Law Center

Date Written: April 28, 2021

Abstract

This short note prepared for an OECD meeting in June 2021 examines several antitrust issues involving analysis of potential competition. While the analysis is not new, it is still useful to collect them together in a unified fashion to show how they are related. In this regard, all the analysis and conclusions flow from the overarching (and obvious) points that exclusionary conduct and agreements that maintain monopoly power very often harm consumers, and that monopoly profits typically exceed the combined duopoly profits earned by the dominant firm and the entrant, if there is successful entry. While this is not inevitably the outcome, it is a useful working assumption for most market situations involving acquisitions, exclusion or agreements with potential or nascent competitors.

Keywords: mergers, vertical mergers, guidelines

Suggested Citation

Salop, Steven C., Potential Competition and Antitrust Analysis: Monopoly Profits Exceed Duopoly Profits (April 28, 2021). Available at SSRN: https://ssrn.com/abstract=3839631 or http://dx.doi.org/10.2139/ssrn.3839631

Steven C. Salop (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9095 (Phone)
202-662-9497 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
216
Abstract Views
1,140
Rank
251,172
PlumX Metrics