Preserving Competition: Economic Analysis, Legal Standards and Microsoft

Competition Policy and Antitrust

Article Snapshot


Ronald A. Cass and Keith Hylton


George Mason Law Review, Vol. 8, No. 1, 1999


This paper criticizes the use of economy theory in antitrust cases.

Policy Relevance

Theory can show that ordinary business behavior might be harmful, but is too ambiguous for a legal standard. The law should clearly describe what conduct is wrong. In close cases, the law should give businesses the benefit of the doubt to support innovation.

Main Points

  • Some theorists (such as Steven Salop and Craig Romaine) use game theory to show that ordinary business conduct can harm or help consumers.


  • This use of theory in law is not appropriate, because it offers no rules a business can use to predict whether their behavior is illegal.


  • A false antitrust conviction is harmful, because it condemns acts that help consumers across the board.
    • False acquittals are not so bad, because competitors will help consumers bypass one firm’s harmful practices over time.


  • To avoid false convictions, the law should punish only firms that take harmful actions for the sole purpose of blocking competition.


  • Software markets are not very different than other markets and do not need special antitrust rules.

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