LECTURES ON ANTITRUST ECONOMIC

Antitrust law regulates economic activity but differs in its operationfrom what is traditionally considered "regulation." Where regulation is oftenindustry-specific and involves the direct setting of prices, productcharacteristics, or entry, antitrust law focuses more broadly on maintaining certainbasic rules of competition. In these lectures Michael Whinston offers an accessibleand lucid account of the economics behind antitrust law, looking at some of the mostrecent developments in antitrust economics and highlighting areas that requirefurther research. He focuses on three areas: price fixing, in which competitorsagree to restrict output or raise price; horizontal mergers, in which competitorsagree to merge their operations; and exclusionary vertical contracts, in which acompetitor seeks to exclude a rival.Antitrust commentators widely regard theprohibition on price fixing as the most settled and economically sound area ofantitrust. Whinston's discussion seeks to unsettle this view, suggesting that somefundamental issues in this area are, in fact, not well understood. In his discussionof horizontal mergers, Whinston describes the substantial advances in recenttheoretical and empirical work and suggests fruitful directions for furtherresearch. The complex area of exclusionary vertical contracts is perhaps the mostcontroversial in antitrust. The influential "Chicago School" cast doubt on argumentsthat vertical contracts could be profitably used to exclude rivals. Recenttheoretical work, to which Whinston has made important contributions, instead showsthat such contracts can be profitable tools for exclusion. Whinston's discussionsheds light on the controversy in this area and the nature of those recenttheoretical contributions.Sponsored by the Universidad Torcuato Di Tella