Price Discrimination and Secondary-Line Competitive Injury: The Law versus the Economics

The past several decades have witnessed considerable convergence between the law and economics applied to antitrust policy. Over this period, economic analysis has been increasingly incorporated in both administrative and judicial enforcement decisions. Perhaps the most glaring exception to this con...

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Bibliographic Details
Published inAntitrust bulletin Vol. 53; no. 1; pp. 75 - 93
Main Authors Beard, T. Randolph, Kaserman, David L., Stern, Michael L.
Format Journal Article
LanguageEnglish
Published Los Angeles, CA SAGE Publications 01.03.2008
Sage Publications Ltd
Subjects
Antitrust
Convergence
Economic theory
Economics
Litigation
Pricing policies
United States > US
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Summary:The past several decades have witnessed considerable convergence between the law and economics applied to antitrust policy. Over this period, economic analysis has been increasingly incorporated in both administrative and judicial enforcement decisions. Perhaps the most glaring exception to this convergence process is the law on secondary-line price discrimination. This article examines the recent convergence of the law and economics that are applied to primary-line price discrimination cases as reflected in the Brooke Group Ltd v Brown & Williamson Tobacco Corp decision. It reviews the Volvo Trucks N Am Inc v Reeder-Simco GMC Inc case to determine whether it represents a similar convergence in secondary-line cases. The article concludes that it does not. The article offers a new economic theory that appears to fit the facts of many secondary-line cases and provide a procompetitive explanation for this form of price discrimination. The article concludes with some policy recommendations for enforcement practices in this area.
ISSN:0003-603X
1930-7969
DOI:10.1177/0003603X0805300106