scholarly journals American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

2019 ◽  
pp. 1-35
Author(s):  
Mark Glick
Keyword(s):  
Well Being ◽  
Consumer Welfare ◽  
Chicago School ◽  
Antitrust Policy ◽  
Lower Price ◽  
Antitrust Enforcement ◽  
American Gothic ◽  
School Vision ◽  
Short Run

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

How Chicago Economics Distorts “Consumer Welfare” in Antitrust

2019 ◽  
Vol 64 (4) ◽  
pp. 495-513
Author(s):  
Mark Glick
Keyword(s):  
Well Being ◽  
Consumer Welfare ◽  
Chicago School ◽  
Antitrust Policy ◽  
Lower Price ◽  
Antitrust Enforcement ◽  
School Vision ◽  
Short Run

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This article argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Judge Bork adopted CW from economics where welfare unambiguously measured utility or well-being. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This article contends that antitrust policy is not welfare based at all and, that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increase welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

Consumer Welfare Theory as an Ethical Consideration:: An Essay on Hipsters, Invisible Feet, and the “Science” of Economics

2018 ◽  
Vol 63 (4) ◽  
pp. 509-528
Author(s):  
Darren Bush
Keyword(s):  
Consumer Welfare ◽  
Antitrust Policy ◽  
Antitrust Enforcement ◽  
Ethical Considerations ◽  
Legislative History ◽  
Ethical Argument ◽  
Sherman Act ◽  
Policy Goals ◽  
Narrow View ◽  
Definition Of

This article outlines the principle of efficiency as taken from physics and misapplied into the realm of economics. The result of the misapplication has been a narrow view of antitrust policy, culminating in an extremely conservative application of the consumer welfare standard. The result of such policy has been increasing concentration in many industries, abdication of any examination of monopoly power in the context of Section 2 of the Sherman Act, and dogmatic defense of “consumer welfare” as the only scientific approach to antitrust law. Part II reviews of the original goals of antitrust, as viewed without the lens of present-day economic efficiency. These are policy goals as described in legislative history and judicial development of common law. As such, they are ethical considerations distinct from consumer welfare. In part III, the article discusses the central tenets of economics in antitrust policy. These central notions are policy considerations that are misapplications of physics. Part IV discusses the physics definition of efficiency, with some insights as to the issues arising from adopting such a standard in terms of antitrust markets. Part V addresses the failures of antitrust using the lens of physics, explaining that consumer welfare is an ethical argument, not a scientific one. Part VI addresses other potential ethical standards for antitrust enforcement, as well as empirical evidence that support such norms. Part VII offers concluding thoughts where the article argues that there are superior ethical norms that would boost antitrust enforcement and that are consistent with the goals of antitrust.

A Premature Postmortem on the Chicago School of Antitrust

2019 ◽  
Vol 93 (4) ◽  
pp. 759-776 ◽  
Author(s):  
Daniel A. Crane
Keyword(s):  
Economic Analysis ◽  
Consumer Welfare ◽  
Chicago School ◽  
Vested Interest ◽  
Antitrust Enforcement ◽  
Political Pressure ◽  
The Creation ◽  
Laissez Faire ◽  
Near Term

The Chicago School of antitrust is often thought to have killed off antitrust enforcement beginning in the late 1970s. In fact, although Chicago school prescriptions were significantly more laissez-faire than the structuralist school Chicago replaced, antitrust enforcement did not die under Chicago's influence. Rather, by directing antitrust to focus on technical economic analysis, Chicago contributed to the creation of a large and entrenched class of antitrust professionals—economists and lawyers—with a vested interest in preserving antitrust as a legal and regulatory enterprise. Today, Chicago School's consumer welfare standard and specific enforcement prescriptions are coming increasingly under political pressure and may be replaced or supplemented in the near term. But Chicago's redirection of antitrust toward technical economic analysis and technocratic reasoning seems likely to remain a durable legacy.

scholarly journals Facing it: assessing the immediate emotional impacts of calorie labelling using automatic facial coding

2021 ◽  
pp. 1-18
Author(s):  
Kate Laffan ◽  
Cass Sunstein ◽  
Paul Dolan
Keyword(s):  
Facial Expression ◽  
Well Being ◽  
Consumer Welfare ◽  
Emotional Impact ◽  
Subjective Well Being ◽  
Welfare Impact ◽  
Health Consciousness ◽  
Short Run ◽  
Policy Work ◽  
The Moment

Abstract Although there has been a proliferation of research and policy work into how nudges shape people's behaviour, most studies stop far short of consumer welfare analysis. In the current work, we critically reflect on recent efforts to provide insights into the consumer welfare impact of nudges using willingness to pay and subjective well-being reports and explore an unobtrusive approach that can speak to the immediate emotional impacts of a nudge: automatic facial expression coding. In an exploratory lab study, we use facial expression coding to assess the short-run emotional impact of being presented with calorie information about a popcorn snack in the context of a stylised ‘Cinema experience’. The results of the study indicate that calorie information has heterogeneous impacts on people's likelihood of choosing the snack and on the emotions they experience during the moment of choice which varies based on their level of health-consciousness. The information does not, however, affect the emotions people go on to experience while viewing movie clips, suggesting that the emotional effects of the information are short-lived. We conclude by emphasising the potential of automatic facial expression coding to provide new insights into the immediate emotional impacts of nudges and calling for further research into this promising technique.

An Econometric Analysis on the Relationship between Globalisation and Inequality in South Africa

2020 ◽  
Vol 11 (1) ◽  
pp. 89-89
Author(s):  
Jacques de Jongh
Keyword(s):  
South Africa ◽  
Well Being ◽  
Causality Analysis ◽  
Global Integration ◽  
Development Indicators ◽  
Long Run ◽  
The World ◽  
Distribution Of Resources ◽  
Short Run ◽  
The Impact

Globalisation has had an unprecedented impact on the development and well-being of societies across the globe. Whilst the process has been lauded for bringing about greater trade specialisation and factor mobility many have also come to raise concerns on its impact in the distribution of resources. For South Africa in particular this has been somewhat of a contentious issue given the country's controversial past and idiosyncratic socio-economic structure. Since 1994 though, considerable progress towards its global integration has been made, however this has largely coincided with the establishment of, arguably, the highest levels of income inequality the world has ever seen. This all has raised several questions as to whether a more financially open and technologically integrated economy has induced greater within-country inequality (WCI). This study therefore has the objective to analyse the impact of the various dimensions of globalisation (economic, social and political) on inequality in South Africa. Secondary annual time series from 1990 to 2018 were used sourced from the World Bank Development indicators database, KOF Swiss Economic Institute and the World Inequality database. By using different measures of inequality (Palma ratios and distribution figures), the study employed two ARDL models to test the long-run relationships with the purpose to ensure the robustness of the results. Likewise, two error correction models (ECM) were used to analyse the short-run dynamics between the variables. As a means of identifying the casual effects between the variables, a Toda-Yamamoto granger causality analysis was utilised. Keywords: ARDL, Inequality, Economic Globalisation; Social Globalisation; South Africa

Theory in closer contact with industrial life: American institutional economists on competition theory and policy

2021 ◽  
pp. 1-18
Author(s):  
Matthew T. Panhans ◽  
Reinhard Schumacher
Keyword(s):  
20Th Century ◽  
Competition Policy ◽  
Self Regulation ◽  
Consumer Welfare ◽  
Antitrust Enforcement ◽  
Mainstream Economic ◽  
Competition Theory ◽  
One Stage ◽  
Wide Range ◽  
Experimental Attitude

Abstract This paper investigates the views on competition theory and policy of the American institutional economists during the first half of the 20th century. These perspectives contrasted with those of contemporary neoclassical and later mainstream economic approaches. We identify three distinct dimensions to an institutionalist perspective on competition. First, institutionalist approaches focused on describing industry details, so as to bring theory into closer contact with reality. Second, institutionalists emphasized that while competition was sometimes beneficial, it could also be disruptive. Third, institutionalists had a broad view of the objectives of competition policy that extended beyond effects on consumer welfare. Consequently, institutionalists advocated for a wide range of policies to enhance competition, including industrial self-regulation, broad stakeholder representation within corporations, and direct governmental regulations. Their experimental attitude implied that policy would always be evolving, and antitrust enforcement might be only one stage in the development toward a regime of industrial regulation.

Book Reviews

2015 ◽  
Vol 53 (4) ◽  
pp. 1033-1036
Keyword(s):  
Cost Benefit Analysis ◽  
Empirical Studies ◽  
Cost Benefit ◽  
Well Being ◽  
Chicago School ◽  
Associate Professor ◽  
Law School ◽  
Hedonic Theory ◽  
The Law ◽  
Institute Of Technology

Matthew D. Adler of Duke University reviews “Happiness and the Law”, by John Bronsteen, Christopher Buccafusco, and Jonathan S. Masur. The Econlit abstract of this book begins: “Assesses how the law affects people's quality of life with a particular focus on criminal punishment and civil lawsuits. Discusses measuring happiness; well-being analysis; well-being analysis versus cost–benefit analysis; happiness and punishment; adaptation, affective forecasting, and civil litigation; some problems with preference theories and objective theories; a hedonic theory of well-being; addressing objections to the hedonic theory; and the future of happiness and the law. Bronsteen is a professor in the Loyola University Chicago School of Law. Buccafusco is an associate professor in the Chicago-Kent School of Law and Codirector of the Center for Empirical Studies of Intellectual Property at the Illinois Institute of Technology. Masur is John P. Wilson Professor of Law in the University of Chicago Law School.”

The Real Effects of Military Spending on Security

2014 ◽  
Vol 20 (3) ◽  
pp. 377-393 ◽  
Author(s):  
Lloyd J. Dumas
Keyword(s):  
Military Spending ◽  
Well Being ◽  
Military Force ◽  
Physical Security ◽  
Dead Weight ◽  
Economic Relationships ◽  
Real Effects ◽  
Long Run ◽  
Short Run

AbstractThe indirect effects of military spending on security are stronger and more important than its direct effects, and its long run impact more telling than its short run impact. In the short run, military spending can be a source of both physical security and economic stimulus. In the long run, it can be counterproductive in terms of physical security and will be a dead weight on the economy. How a society’s productive resources are deployed, as between military spending and more economically productive activities, sets it on a long-term course with powerful implications for the ability of its economy to do what it is supposed to do – provide for the material well-being of the population as a whole. The mechanism by which the extensive and extended diversion of productive economic resources to economically unproductive military spending drags an economy down is analyzed. Furthermore, it is possible to use properly structured international and domestic economic relationships in place of threats or use of military force to increase national and international security, while at the same time enhancing, rather than degrading, economic wellbeing. Three principles for structuring such a “peacekeeping economy” are set forth.

Does A Major Earthquake Change Attitudes and Well-Being Judgments? A Natural Experiment

2017 ◽  
Vol 9 (3) ◽  
pp. 364-371 ◽  
Author(s):  
Shigehiro Oishi ◽  
Florian Kohlbacher ◽  
Hyewon Choi
Keyword(s):  
Life Satisfaction ◽  
Natural Disaster ◽  
Big Five ◽  
Natural Experiment ◽  
Well Being ◽  
Demographic Variables ◽  
Big Five Personality ◽  
Regression Discontinuity Design ◽  
Short Run ◽  
Design Analyses

Does a major natural disaster change life satisfaction? This study is a rare natural experiment, in which roughly half of the respondents completed the survey before and the other half completed it after the Great East Japan Earthquake of March 11, 2011. A series of regression discontinuity design analyses showed that those who completed the survey after the earthquake reported being less satisfied with their lives than those who happened to complete the survey before the earthquake. There were no discontinuity on demographic variables and other consumer attitudes. The main findings remained virtually unchanged when we controlled for Big Five personality traits and demographic variables. Together, the current findings suggest that the experience of a major natural disaster changes their life satisfaction at least in the short run.

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