The 2023 Merger Guidelines: Lessons in the Importance of Incipiency, Modern Economics, and Monopsony

Forthcoming in Competition Policy International Antitrust Chronicle

12 Pages Posted: 16 May 2024

See all articles by Susan Athey

Susan Athey

Stanford Graduate School of Business

David Lawrence

United States Department of Justice

Date Written: April 30, 2024

Abstract

Leading the Merger Guidelines drafting project at the Antitrust Division was an incredible opportunity to learn from the best minds in the antitrust community as they debated the details of merger review. Two years of public engagement generated not only many thousands of comments, but many useful ideas and an incredible collection of research. This essay highlights three important lessons the authors took from the initiative: (a) the importance of understanding and applying the Clayton Act’s incipiency standard when evaluating imperfect predictive tools like structural analysis and econometric models, (b) the extent to which modern economics has advanced beyond simplistic models of perfect competition that sometimes still influence merger review, and (c) the need to protect input markets from mergers that enable or entrench monopsony power.

Suggested Citation

Carleton Athey, Susan and Lawrence, David, The 2023 Merger Guidelines: Lessons in the Importance of Incipiency, Modern Economics, and Monopsony (April 30, 2024). Forthcoming in Competition Policy International Antitrust Chronicle , Available at SSRN: https://ssrn.com/abstract=4813045

Susan Carleton Athey

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

David Lawrence (Contact Author)

United States Department of Justice ( email )

950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
United States

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