Peritz, Rudolph J. R. --- "Dynamic Efficiency and US Antitrust Policy" [2002] ELECD 92; in Cucinotta, Antonio; Pardolesi, Roberto; Van den Bergh, J. Roger (eds), "Post-Chicago Developments in Antitrust Law" (Edward Elgar Publishing, 2002)

Book Title: Post-Chicago Developments in Antitrust Law

Editor(s): Cucinotta, Antonio; Pardolesi, Roberto; Van den Bergh, J. Roger

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760016

Section: Chapter 6

Section Title: Dynamic Efficiency and US Antitrust Policy

Author(s): Peritz, Rudolph J. R.

Number of pages: 21

Extract:

6. Dynamic efficiency and US antitrust
policy
Rudolph J.R. Peritz

INTRODUCTION
In the United States, we are witnessing two important shifts in antitrust. Both
shifts result from the increased importance of innovation to competition
policy, especially in the high technology sectors of the economy. First, there
are tectonic rumblings shaking the very ground that has supported antitrust
since the mid-1970s. That ground has been neoclassical price theory and its
static model of efficient markets. The rumblings are produced by a turn to the
economics of dynamic efficiency and, in consequence, by the tensions
between settled concerns about price and output, and new concerns about
promoting innovation and maintaining market access. Although the nearness
of Mount Aetna to Taormina, the Sicilian resort where the paper for this chap-
ter was presented, makes particularly appropriate the metaphor of tectonic
rumblings, Joseph Schumpeter's more familiar image of a `perennial gale of
creative destruction' would do just as well to describe the threat to price
theory's domination seen in dynamic efficiency's expanding share of the
market for antitrust economics in America. This heightened attraction to
dynamic efficiency has, of course, brought new concerns. Most of all, econo-
mists and policy makers are working to understand more clearly the competi-
tive effects of innovation and its commercialization, protected by expanding
intellectual property rights. More and more, their work is informed by Brian
Arthur's analysis of increasing returns and path dependency.1
There is a second important shift that is ...