┌─────────────────────────────────────────────────────────────────────────┐ │ │ │ │ │ │ │ _ __ ____ _ │ │ | |/ /___ _ _ / ___|___ _ __ ___ ___ _ __ | |_ │ │ | ' // _ \ | | | | | / _ \| '_ \ / __/ _ \ '_ \| __| │ │ | . \ __/ |_| | | |__| (_) | | | | (_| __/ |_) | |_ │ │ |_|\_\___|\__, | \____\___/|_| |_|\___\___| .__/ \__| │ │ |___/ |_| │ │ │ │ │ │ │ │ │ └─────────────────────────────────────────────────────────────────────────┘ SILICON VALLEY ANTITRUST V.5 BOALT HALL SCHOOL OF LAW (2015) Hanno Kaiser FROM ZERO SUM TO GROWING THE PIE (1) Old world - Expectation: almost universal poverty - Focus: distribution (distributive justice) (2) New world - Expectation: "universal opulence" (a decent standard of living for everyone) - Focus: production (or GDP growth) PREREQUISITES FOR GDP GROWTH - Property - Contracts - Competition (= our focus) SOCIETAL AND INDIVIDUAL GOALS (1) Societal goal: increase output (2) Individual goal: increase profit STRATEGIES TO INCREASE PROFITS (1) Get rich by making others better off - increases output ("growing the pie") - increases profit ("reward for growing the pie") - Harmony between individual and societal goals (2) Get rich by making others worse off - decreases output ("shrinking the pie") - increases profit ("take a bigger slice") - Mismatch between individual and societal goals - The antitrust laws discourage (2) but do not require (1) ANTITRUST: "REGULATED COMPETITION" ┌────────────────┬────────────────┬────────────────┐ │ Not enough │ Competition on │ "Unfair" │ │ competition │ the merits │ competition │ ├────────────────┼────────────────┼────────────────┤ │ Collusion │ │ Exclusion │ ├────────────────┤ ├────────────────┤ │ │ │Harms rivals to │ │ │ │ the point of │ │ │ │ damaging the │ │ Directly harms │ │ competitive │ │ consumers │ │ process, │ │ │ │ resulting in │ │ │ │ harm to │ │ │ │ consumers │ ├────────────────┤ ├────────────────┤ │ Strongly │ │ │ │ disfavored, │ │ Disfavored │ │criminal in some│ │ │ │ cases │ │ │ ├────────────────┤ ├────────────────┤ │ │ │ │ │§1 (ROR, per se)│ │ §2, §1 (ROR) │ │ §7 │ │ §7 │ │ │ │ │ └────────────────┘ └────────────────┘ ECONOMIC GOALS - Productive efficiency (make more with less) - Allocative efficiency (ensure that goods travel to those who value them most) - Dynamic efficiency (create incentives to invest in innovation) NON-ECONOMIC GOALS - Protect the political process from dependency on concentrated economic power ("too big to fail")? - Fairness: Reduce systemic bargaining inequality?