Antitrust Time Travel: Entry & Potential Competition

Abstract

Entry defenses and potential competition doctrine have much in common. Both draw from predictions about future entry. Both demand difficult assessments of entry barriers and incentives. And both suffer from confused thinking today. This Article offers a clarifying perspective. Rather than focus on matters of litigation posture (who wins or loses if an argument is proved) we look to the type of analytical time travel being performed. Corrective entry defenses and actual potential competition theories involve exercises in forward time travel: reasoning about how future entry will impact future competition. Preventative entry defenses and perceived potential competition theories involve exercises in backward time travel: reasoning about how threats of future entry impact current competition. Grouping theories in this way reveals analytical flaws and unprincipled asymmetries in current thinking. It also exposes problems and paradoxes that beset all time travel arguments in antitrust analysis.

Keywords: entry, potential competition, time travel, economics, antitrust

JEL Classification: K21, C72, L13