The Lawful Acquisition and Exercise of Monopoly Power and Its Implications for the Objectives of Antitrust
David Evans () and
CPI Journal, 2008, vol. 4
The antitrust laws of the United States have, from their inception, allowed firms to acquire significant market power, to charge prices that reflect that market power, and to enjoy supra-competitive returns. This article shows that this policy, which was established by the U.S. Congress and affirmed repeatedly by the U.S. courts, reflects a tradeoff between the dynamic benefits that society realizes from allowing firms to secure significant rewards, including monopoly profits, from making risky investments and engaging in innovation; and the static costs that society incurs when firms with significant market power raise prices and curtail output.
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Persistent link: https://EconPapers.repec.org/RePEc:cpi:cpijrn:4.2.2008:i=5155
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