Revitalizing Antitrust in Its Second Century: Essays on Legal, Economic, and Political Policy

By Harry First; Eleanor M. Fox et al. | Go to book overview

In part, this is because the "right" answer depends on one's assessment of the costs associated with error. This is most easily illustrated in the merger context. Those who believe that horizontal mergers have a strong potential for creating efficiencies and that domestic concentration is unlikely to result in monopoly pricing regardless of the degree of imports will wish to "tilt" the analysis of import competition to downplay the concern that imports may not always be forthcoming in response to a domestic price increase. Those who are less sanguine about the societal benefits of horizontal mergers, and are more concerned that higher domestic concentration would, in the absence of imports, result in noncompetitive pricing, are more likely to attach a significant weight to the possibility that economic or political factors will eliminate the threat of imports and thus will want to define markets more narrowly to minimize the chances of permitting what might turn out to be a noncompetitive merger. 78

There is no question that foreign competition can exercise a significant restraint on the exercise of market power by domestic firms. There is also no question that the traditional approaches will often underestimate the significance of foreign competition by concentrating on historical snapshots of the degree of foreign competition and failing to take into account the added incentive provided to foreign firms of any attempt by domestic firms actually to exercise market power. However, the approaches that have been suggested to deal with this problem carry with them the possibility of overstating the degree to which foreign competition can be depended upon in any given instance. We can only suggest that policy makers consider carefully their own degree of risk aversion along with the theoretical and empirical analysis we have offered in deciding how to deal with the question of the significance to attach to the potential for foreign competition.


APPENDIX

To illustrate the lack of robustness in the Landes and Posner result, consider a market in which the foreign producer that supplies imports to the United States has market power in its home market (which is protected by barriers to entry, such as quotas) and price discriminates between the U.S. and its home markets. Figure 20.1 illustrates this case. In this figure, MC represents the marginal cost of production for the foreign firm and the domestic fringe. DB. and MRB represent the demand and marginal revenue curves faced by the foreign firm in its home market, and P0A represents the initial market price the foreign firm faces in market A (perhaps in the United States).

-367-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Revitalizing Antitrust in Its Second Century: Essays on Legal, Economic, and Political Policy
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 550

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.