Critique of Williamson's Economic Case for an Efficiencies Defense in Antitrust Merger Analysis: Are Rectangles Really Larger than Triangles?
69 Pages Posted: 17 Jul 2003
Date Written: June 17, 2003
This article examines the pricing, output, and welfare effects resulting from a merger in which a pre-merger competitively organized market becomes a post merger monopolistically organized market, and the acquiring firm realizes substantial productive efficiencies. The findings call into question the basic assertion by Professor Williamson and others that productive efficiencies are likely to offset the loss in welfare represented by the welfare triangle.
Keywords: antitrust, mergers, welfare triangle
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