Competition policy with optimally differentiated rules instead of per se rules vs. rule of reason

Arbeitspapier

Both in US antitrust and EU competition policy a development to a broader appli-cation of rule of reason instead of per se rules can be observed. In the European discussion the attempt to base competition policy on a more economic approach is mainly viewed as im-proving the economic analysis in the assessment of specific cases. In this paper it is shown from a general law and economics perspective that the application of rules instead of focus-sing on case-by-case analyses can have many advantages (less regulation costs, rent seeking and knowledge problems), although an additional differentiation of rules through a deeper assessment can also have advantages in regard to the reduction of decision errors of type I and II. After introducing the notion of a continuum of more or less differentiated rules, we show - based upon law and economics literature upon the optimal complexity of rules - in a simple model that a competition rule is optimally differentiated, if the marginal reduction of the sum of error costs (as the marginal benefit of differentiation) equals the marginal costs of differen-tiation. This model also allows for a more detailed analysis of the most important determi-nants of the optimal degree of rule-differentia¬tion. From this law and economics perspective, competition policy should consist mainly of (more or less differentiated) rules and should only rarely rely on case-by-case analysis. Therefore the main task of a more economic ap-proach is to use economics for the formulation of appropriate competition rules.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Marburger Volkswirtschaftliche Beiträge ; No. 2006,06

Classification and Topics

• Classification: Wirtschaft ; Antitrust Law ; Legal Procedure, the Legal System, and Illegal Behavior: General ; Antitrust Issues and Policies: General
• Subject: Competition Policy ; European Competition Law ; Rule of Reason ; Wettbewerbspolitik ; EU-Politik ; EU-Staaten ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Christiansen, Arndt ; Kerber, Wolfgang
• Event: Veröffentlichung
• (who): Philipps-Universität Marburg, Fachbereich Wirtschaftswissenschaften
• (where): Marburg
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/29855
• Last update: 10.03.2025, 11:45 AM CET