Bài giảng MicroEconomics - Chapter 018 Antitrust Policy and Regulation

Antitrust Policy and RegulationChapter 18McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter ObjectivesAntitrust laws in the United StatesInterpretation and application of antitrust lawsNatural monopoliesSocial regulation18-2Antitrust LawsThe purpose:Prevent monopolyPromote competitionAchieve allocative efficiencyHistorical backgroundRegulatory agenciesAntitrust laws18-3Antitrust LawsSherman Act 1890Clayton Act 1914Outlaw price discriminationProhibit tying contractsNo interlocking directoratesFederal Trade Commission Act 1914Wheeler-Lea Act 1938Celler-Kefauver Act 195018-4Antitrust PolicyIssues of interpretationMonopoly behavior or structure1911 Standard Oil Case1920 U.S. Steel Case1945 Alcoa CaseThe relevant market1956 DuPont Cellophane CaseIssues of enforcement18-5Effectiveness of Antitrust LawsMonopolyMicrosoft CaseMergersHorizontal mergerVertical mergerConglomerate merger18-6Types of MergersAutomobilesBlue JeansAutosGlassBlueJeansDenimFabricACBDEFZYXWVUTHorizontal MergerConglomerate MergerVertical Merger18-7Merger guidelinesThe Herfindahl IndexPrice fixingPrice discriminationTying contractsEffectiveness of Antitrust Laws18-8Natural MonopolyEconomies of scalePublic utilitiesElectricity, water, gas, phoneSolutions for better outcomesPublic ownershipPublic regulationPublic interest theory of regulation18-9Industrial RegulationRegulators establish rates to give natural monopoly “fair return”No incentive to reduce costX-inefficiencyPerpetuate monopolyConditions of natural monopoly can end18-10Social RegulationApplies “across the board” to all industriesFood and Drug Administration 1906Equal Employment Opportunity Commission 1964Occupational Safety and Health Administration 1971Environmental Protection Agency 1972Consumer Product Safety Commission 197218-11Social RegulationOptimal level of social regulationIn support of social regulationCriticisms of social regulationTwo remindersThere is no free lunchLess government is not always better than more18-12United States vs. MicrosoftCharged May 1998 under the Sherman ActAccused of having a “Windows” monopolyDistrict court findings:Used anticompetitive meansDistrict court remedyAppeals court rulingFinal settlement18-13Key Termsantitrust policyindustrial regulationsocial regulationSherman ActClayton Acttying contractsinterlocking directoratesFederal Trade Commission Actcease-and-desist orderWheeler-Lea ActCeller-Kefauver ActStandard Oil caseU.S. Steel caserule of reasonAlcoa caseDuPont cellophane caseMicrosoft casehorizontal mergervertical mergerconglomerate mergerper se violationsnatural monopolypublic interest theory of regulationlegal cartel theory of regulation18-14Next Chapter PreviewAgriculture: Economics and Policy18-15