Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries

David Evans and Richard Schmalensee

No 8268, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Competition in many important industries centers on investment in intellectual property. Firms engage in dynamic, Schumpeterian competition for the market, through sequential winner-take-all races to produce drastic innovations, rather than through static price/output competition in the market. Sound antitrust economic analysis of such industries requires explicit consideration of dynamic competition. Most leading firms in these dynamically competitive industries have considerable short-run market power, for instance, but ignoring their vulnerability to drastic innovation may yield misleading conclusions. Similarly, conventional tests for predation cannot discriminate between practices that increase or decrease consumer welfare in winner-take-all industries. Finally, innovation in dynamically competitive industries often involves enhancing feature sets; there is no sound economic basis for treating such enhancements as per se illegal ties.

JEL-codes: L4 (search for similar items in EconPapers)
Date: 2001-05
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Published as Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries , David S. Evans, Richard Schmalensee. in Innovation Policy and the Economy, Volume 2 , Jaffe, Lerner, and Stern. 2002

Downloads: (external link)
http://www.nber.org/papers/w8268.pdf (application/pdf)

Related works:
Chapter: Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:8268

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8268

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().