Dynamic Analysis and the Limits of Antitrust Institutions

Abstract

The static model of competition dominates modem antitrust analysis. The model has served antitrust law well, but it has some familiar drawbacks. In particular, it ignores the impact that competitive activities undertaken today will have upon future market conditions. Many commentators therefore have urged the adoption of a dynamic model of competition in antitrust analysis. These commentators have used the term "dynamic analysis" in at least two different ways. The first refers to incorporating the creation of new products and business models into the static model of competition. The second refers more broadly to the relationship between present competitive activities and future market conditions. We use the term in this second, broader sense throughout this article.