'Schumpeterian' Competition and Antitrust Policy in High-Tech Markets

Abstract

In this paper, we discuss an important movement in contemporary antitrust thinking, the Schumpeterian School. The School's fundamental argument is that antitrust enforcers can better preserve and promote the technological innovation that drives the modern economy by reducing their reliance on short-term indicia of product-market competition. Such arguments are of particular relevance to firms, and the lawyers who counsel them, in such high-tech regions as California's Silicon Valley, Boston's Route 128, and northern Virginia's Dulles corridor. We discuss the specific challenges to conventional antitrust enforcement that Schumpeterian arguments pose, and we examine whether available economic evidence supports the fundamental retreat from antitrust enforcement for which some members of the Schumpeterian School call in the name of promoting innovation.

Keywords: Antitrust, Schumpeter, innovation

JEL Classification: K21, L1