Stigler’s theory of oligopoly remains a central pillar in merger policy in most, if not all, antitrust regimes around the world. Dennis Carlton & Sam Peltzman (Univ. of Chicago)

Tirole has written an excellent primer focused on what is known about tying and what he believes is desirable antitrust policy concerning the practice. Although the authors agree with most of Tirole’s arguments, there are two topics for which our perspective is somewhat different.

Market definition is a crude though sometimes useful tool for identifying market power. The ambiguity in what analysts mean by market power (price above marginal cost, or excess profits) cannot be resolved by market share.

This article is a transcript of the presentations given by Dennis Carlton and Michael Salinger at the University College London’s Annual Antitrust and Regulation Forum held on February 21, 2007 and hosted by the Jevons Institute for Competition Law and Economics.

Retrospective studies that ask whether prices went up post-merger are surprisingly poor guides for analyzing merger policy.