Economic Inquiry

Articles from Vol. 30, No. 2, April

An Analytic History of Delivered Price Litigation: Do Courts Properly Distinguish Rivalrous from Collusive Instances?
The federal judiciary's present, cautious approach to delivered pricing is appropriate. Using court records and recent contributions to the economic literature, this article evaluates the antitrust history of those practices. Delivered pricing can...
An Efficiency Explanation for Why Firms Second Source
Firms facing research costs and demand uncertainty may engage in second-sourcing, in which potential suppliers agree to pool production facilities. I show how sellers and buyers both can benefit from the practice. Second-sourcing allows firms to meet...
Does Industrial Diversity Always Reduce Unemployment? Evidence from the Great Depression and After
A portfolio model of employment predicts that cities with more diversified employment opportunities should experience lower unemployment rates than less diversired cities. Empirical analysis of the diversity-unemployment relationship using Census data...
Empirical Evidence on FTC Enforcement of the Merger Guidelines
The Justice Department's 1982/1984 merger guidelines identify various factors-- concentration, entry barriers, ease of collusion, efficiency--that would thereafter determine whether the government will challenge a merger. Analysts have criticized enforcement...
How Many Cheers for Antitrust's 100 Years?
This article describes the ambiguity inherent is U.S. antitrust policy, arguing that it is a necessary consequence of the true, but not commonly understood, task of antitrust policy. Competition is multidimensional in form, and its different dimensions...
Private Interest Support for Efficiency Enhancing Antitrust Policies
Recent discussions of antitrust based on the private interest theory of government conclude that the real, as opposed to the stated, purpose of antitrust legislation is to protect politically influential industries against competition. Yet several...
Some Evidence on Lump Sum versus Convex Costs of Changing Prices
2 Two models in which price stickiness results from price adjustment costs are tested. One, an (s,S) pricing model, assumes lump-sum adjustment costs and predicts firms will make relatively large, infrequent price changes. The other assumes convex...
Some Real Evidence on the Real Bills Doctrine versus the Quantity Theory
Researchers interested in testing between the Real Bills doctrine and the Quantity Theory approach to inflation in the face of rapid, deficit-financing money growth are confronted by an observation equivalence problem. This paper identifies a data...
Takeovers: Managerial Incompetence or Managerial Shirking?
Agency theory identifies managerial shirking as the cause for takeovers, while other explanations focus on low ability managers. This paper formalizes Jensen's free cash flow variant of agency theory by constructing a simple two-period game which captures...
The Influence of Economics on Antitrust Law
Economists today play prominent roles in formulating antitrust policy and litigating antitrust cases. This paper explains why economics influences antitrust law and describes how economic theories enter and shape the antitrust system. Antitrust policy...
The Legislative History of the Sherman Act Re-Examined
According to Robert Bork's influential analysis, the Sherman Act was expressly instituted by the 51st Congress to advance consumer welfare, but has often been misinterpreted by federal courts handing down anticonsumer decisions. This paper suggests...
The Rise of the Chicago Packers and the Origins of Meat Inspection and Antitrust
The Meat Inspection Act of 1891 and the Sherman Act of 1890 are closely tied. This link makes clearer Congress' intent in enacting the legislation. Both laws were products of economic conditions after 1880 and reflected, in part, widespread concern...
Toward a Positive Economic Theory of Antitrust
Most economists associate antitrust policy with the Sherman and Clayton Acts. Nonetheless, there is in England and America a much older body of antitrust law, namely, the common law of restraint of trade. This regulation, like language and markets,...