The Third Leg of the Antitrust Stool

Abstract

ALBERT A. FOER is president, American Antitrust Institute, an independent education, research, and advocacy organization (see www.antitrustinstitute.org). 1The math of my example is simple. A 50% chance of tying and a 50% chance of winning in overtime yields a 25% probability of winning. A 33% chance of winning is better. Antitrust policy is unbalanced. Like a two-legged stool, it wobbles in a state of disequilibrium. The two legs are law and neoclassical economics. Law comes at the relationship between the state and the private sector through objective rules and remediation for violating authoritative communal norms. Economics comes at it through the decentralized but objective interaction of supply and demand in the market. Missing is the focus on the subjective world of both the firm and the managers who make decisions within the firm and the consumers who purchase from the firm. By providing this perspective, business schools have the potential for making a major contribution to the evolution of antitrust policy. The disciplines of marketing and strategic management can be the third leg that gives the antitrust stool stability. First, business schools possess the ability to help antitrust move beyond neoclassical abstractions about economic man. Second, business schools have something important to say about dynamic economics, which is not captured by neoclassical assumptions.