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Book Title: The Goals of Competition Law
Editor(s): Zimmer, Daniel
Publisher: Edward Elgar Publishing
ISBN (hard cover): 9780857936608
Section: Chapter 1
Section Title: On the Choice of Welfare Standards in Competition Law
Author(s): Kaplow, Louis
Number of pages: 24
Extract:
1. On the choice of welfare standards
in competition law
Louis Kaplow*
1 INTRODUCTION
The interpretation and application of competition law to horizontal
restraints, mergers, and exclusionary (abusive) practices by dominant
firms depends on what the laws' goals are deemed to be. Increasingly, and
especially in the United States, a concern for economic welfare is taken to
be central. As a result, much attention has been devoted to determining
which rules best advance welfare. There nevertheless remains dispute over
whether total welfare should be the objective, as is conventional under a
welfare economic approach, or only consumer welfare should count.1
This chapter examines two sets of issues that bear on this choice. First,
supposing that society is concerned with the equality of the distribution
of income, does it make sense to employ competition law in pursuit of
this aim, in particular by giving primary or exclusive weight to consumer
welfare, downgrading or ignoring producer welfare? Second, what are the
* Finn M W Caspersen and Household International Professor of Law and
Economics, Harvard University, and Research Associate, National Bureau of
Economic Research, United States of America. This chapter derives from a lecture
that was the keynote address for the Fifth Annual Conference of the Academic
Society for Competition Law, on `Goals of Competition Law', and the inaugura-
tion for the Center for Advanced Studies in Law and Economics at the University
of Bonn. The first part of this chapter grows out of suggestions in L Kaplow and
C Shapiro (2007), ` ...
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URL: http://www.austlii.edu.au/au/journals/ELECD/2012/401.html