European dominant position and american monopolization: a unifying approach from basic game theory

Pier Luigi Parcu ()
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Pier Luigi Parcu: Studio Economico Parcu & Associati, Roma (ltaly)

Banca Nazionale del Lavoro Quarterly Review, 2006, vol. 59, issue 237, 171-192

Abstract: In this paper I use basic game theory tools to explore the logical consequences of some fundamental legal definitions of European and American antitrust. In a competition game, in which there is a true monopolistic/dominant firm (MDF) and competition law is respected, thus limiting the legitimate set of choices of the MDF, I state in a formal theorem that an MDF has a strictly independent dominant strategy, so its choices should never be a source of ex post regret. Other players in the competition game, anticipating implementation of the dominant strategy, will optimize their behaviour taking it into account and thus be more able to select an optimal solution among all possible outcomes. This definition has some practical value: the 'surprise' choice of a non-dominant strategy becomes a hint of an illegal abuse ofdominant position or monopolisation offence; also this idea is formalized in a theorem.

Keywords: Competition; Firm; Firms; Law (search for similar items in EconPapers)
JEL-codes: K21 L11 L25 L40 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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