Behavioral Economics: Antitrust Implications

By Stephen Martin

U.S. Supreme Court decisions dictate that evidence in antitrust cases should be interpreted in accordance with the realities of competition in the marketplace, but seem to interpret such evidence as if the characteristics of most markets were close to the assumptions of the economic model of perfect competition. This is inconsistent with the role of the model of perfect competition in economic theory and with economists’ understanding of the behavior of economic agents.

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