ANTITRUST

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ANTITRUST

• Music Claude DeBussy
• Prelude Afternoon of a Faun (1894)
• Nocturnes (1900)
• La Mer (The Sea) (1905)
• Performed by Orchestre de la Suisse Romande,
  Conductor Armin Jordan (1991)

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Possible Goals

• Balance Allocative Productive Efficiency
• Protect Small Businesses
• Concern re Survival Right to Profit
• Concern re Concentrated Political Power
• Distributive Justice Prevent Overcharges to
  Consumers
• Business Ethics Outlaw Offensive Commercial
  Practices

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Antitrust Revolution

• 4th Edition Contains Thirteen Case Studies I
  Have Assigned in Prior Years
• 5th Edition Only Has Six of These

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SCOPE ENFORCEMENT

1. The Reach of the Antitrust Laws
2. Public Enforcement
3. Private Enforcement
4. Relation Between Procedure Substance
5. Conduct of Large Private Civil Lawsuit

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CONDUCT OF LARGE PRIVATE CIVIL LAWSUITS
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Conduct of Large Private Civil Lawsuits

• Primary Focus Settlement
• Secondary Focus Summary Judgment

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Order of Proceedings

• Preliminary Negotiations
• Complaint
• Motion to Dismiss Part or All
• Investigation Discovery
• Summary Judgment Motions
• Trial Prep/Negotiations

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Investigation Discovery Interactive Process

• Legal Research ? Set of Relevant Facts to
  Investigate
• Discovery of Facts ? More Detailed Legal Qs to
  Research
• Theories Change as Get More Info

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Investigation Discovery Goals

• Defendant
• Limit Info Going to Plaintiff
• Identify D Theory of Case ( Support)
• Identify Evidence Key to P Theory of Case
• Plaintiff Find Evidence Sufficient to Survive
  Summary Judgment
• Evidence Consistent w P Theory
• Evidence Inconsistent w D Theory

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Investigation Discovery Finding Evidence

• Witness Interviews
• Early Interrogatories
• Contentions
• I.D. Witnesses Documents
• Document Review (Most Important)
• Depositions
• Later Interrogatories What Evidence Supports
  Claims

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Order of Proceedings

• Preliminary Negotiations
• Complaint
• Motion to Dismiss Part or All
• Investigation Discovery
• Summary Judgment Motions
• Trial Prep/Negotiations

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THEMES OF THIS COURSE

1. Power of Attorneys Legal Academics to Change
   the Law

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HISTORICAL TRENDS

• 1945-75 Anti-Big Business Ideology
• 1975-92 Antitrust Revolution
• 1992-2000 Line-Drawing and Some
  Counter-Revolution
• 2001 ???

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INTRODUCTION TO THE ECONOMICS OF ANTITRUST
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ASSUMPTIONS OF CLASSICAL ECONOMICS

• PEOPLE ACT RATIONALLY TO MAXIMIZE THEIR OWN
  INTERESTS

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ASSUMPTIONS OF CLASSICAL ECONOMICS

• PEOPLE ACT RATIONALLY TO MAXIMIZE THEIR OWN
  INTERESTS
• RESOURCES MOVE TO MOST VALUABLE USE IF VOLUNTARY
  EXCHANGE PERMITTED

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VALUE

• MEASURED BY AGGREGATE CONSUMER WILLINGNESS TO PAY
  FOR THINGS

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EFFICIENCY

• EXPLOITING ECONOMIC RESOURCES TO MAXIMIZE VALUE

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Given these definitions

• Voluntary transactions are efficient

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Given these definitions

• Voluntary transactions are efficient
• Free market is efficient
• allows sequences of transactions
• resources end up w those who most value them

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Given these definitions

• Voluntary transactions are efficient
• Free market is efficient
• allows sequences of transactions
• resources end up w those who most value them
• Interference with market by government or cartel
  is inefficient

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PROBLEMS WITH ASSUMPTIONS

• DEFINITION OF VALUE
• PEOPLE OFTEN IRRATIONAL

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PROBLEMS WITH ASSUMPTIONS

• DEFINITION OF VALUE
• CONSUMER CULTURE
• DEPENDS ON INCOME DISTRIBUTION
• MORE MORE VOTES

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PROBLEMS WITH ASSUMPTIONS

• PEOPLE OFTEN IRRATIONAL
• OFTEN APPEAR TO ACT AGAINST SELF-INTEREST
• OFTEN PERCEIVE SELVES ACTING AGAINST SELF-INTEREST

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PROBLEMS WITH ASSUMPTIONS

• Raise Qs About Normative Use of Theory
• Claims that results of comp. market always
  desirable
• Claims that interference w comp. market always bad

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PROBLEMS WITH ASSUMPTIONS

• Raise Qs About Normative Use of Theory
• Theory Often Describes World Pretty Well

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PROBLEMS WITH ASSUMPTIONS

• Raise Qs About Normative Use of Theory
• Theory Often Describes World Pretty Well
• ME Works Best if Addressing Basic Consumer Items

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DEMAND CURVE

• GENERALLY BUY MORE OF GOOD THE LESS IT COSTS

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DEMAND
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DEMAND CURVEGENERALLY BUY MORE OF GOOD THE LESS
IT COSTS

• SUBSTITUTION EFFECT
• INCOME EFFECT

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DEMAND CURVEGENERALLY BUY MORE OF GOOD THE LESS
IT COSTS

• SUBSTITUTION EFFECT AS GOOD BECOMES CHEAPER, BUY
  IT INSTEAD OF ALTERNATIVES
• INCOME EFFECT

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DEMAND CURVEGENERALLY BUY MORE OF GOOD THE LESS
IT COSTS

• SUBSTITUTION EFFECT
• INCOME EFFECT AS GOOD BECOMES CHEAPER,
  PURCHASING POWER INCREASES, SO BUY MORE

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DEMAND CURVEGENERALLY BY MORE OF GOOD THE LESS
IT COSTSEXCEPTIONS (RARE)

• INFERIOR GOODS
• LUXURY GOODS

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DEMAND CURVEGENERALLY BY MORE OF GOOD THE LESS
IT COSTSEXCEPTIONS

• INFERIOR GOODS GOODS YOU BUY MORE OF, THE LESS
  YOU HAVE
• LUXURY GOODS

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DEMAND CURVEGENERALLY BY MORE OF GOOD THE LESS
IT COSTSEXCEPTIONS

• INFERIOR GOODS
• LUXURY GOODS GOODS YOU BUY BECAUSE OF THE HIGH
  PRICE

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FACTORS AFFECTING DEMAND

• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES

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FACTORS AFFECTING DEMAND

• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES

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FACTORS AFFECTING DEMAND

• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES

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FACTORS AFFECTING DEMAND

• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES