A Critical Evaluation of the Chicago School of Antitrust Analysis

I. The Perception of Competition as a Dynamic Process.- II. Premises and Assumptions of the Chicago School's Concept of Competition.- 1. Rationality and Autonomy of Economic Agents.- 2. Perfectly Competitive Markets.- 3. Workability of the Market Mechanism.- 4. Lang-run Effectiveness of the Market Process (Time Horizon.- III. Antitrust Theory and Public Policy.- 1. Market Structure Interference.- 2. Market Behavior Interference.- IV. The Chicago School's Approach to Antitrust Theory.- 1. Method of Competition Analysis.- 2. Consumer Welfare as Chicago's Antitrust Goal.- a. Measuring Consumer Welfare: The Efficiency Criterion (Welfare Indicator).- i. Allocative Efficiency.- ii. Productive Efficiency.- (1) Economies of Scale.- (2) Transaction-Cost Efficiencies.- iii. Monopoly Power and Productive Efficiency: Williamson's Trade-Off Model.- b. Allocative and Productive Efficiency as the Sole Criterion for Consumer Welfare: A Critique.- i. The Omission of Other Objectives.- ii. The State of Perfect Competition as a Standard of Reference (Theory of Second Best).- iii. The Failure to Consider External Effects.- iv. The Profitability Approach as an Alternative Concept of Efficiency Measurement.- c. The Omission of Dynamic Efficiency Aspects: The Case of Technological Progress.- i. Firm Size and Technological Progress.- ii. Concentration and Technological Progress.- iii. The Chicago School and Technological Progress.- V. Evaluating Concentration from the Chicago Point of View.- 1. Corporate Size and Industry Concentration as Evidence of Superior Efficiency.- 2. Causes of Monopoly Power.- a. Control of a Scarce Input.- b. Legal Protection of Monopoly Power.- c. Monopoly Power in the Long Run.- 3. Measuring Monopoly Power.- 4. Determinants of Market Structure and the Effectiveness of Competition.- a. Barriers to Entry.- b. Advertising.- c. The Lack of an Oligopoly Theory.- 5. The Economic Effects of Mergers.- a. Horizontal Mergers.- b. Vertical Mergers.- c. Conglomerate Mergers.- 6. Anticoncentration Policy from the Chicago Point of View.- a. Merger Control.- b. Divestiture.- c. Deregulation.- VI. The Evaluation of Anticompetitive Behavior.- 1. Explicit and Implicit Collusion.- 2. Exclusionary Practices.- 3. Tying Arrangements.- 4. Predatory Pricing.- 5. Resale Price Maintenance.- VII. A Critical Resume of the Chicago Approach to Antitrust Policy.- 1. Underlying Assumptions and Methodology.- 2. The Goals of Antitrust Policy.- 3. The Role of Theory and Empirical Evidence.- 4. Policy Recommendations.- 5. The Chicago School Approach as a Basis for Antitrust Policy.