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Antitrust and Regulation

In: Economic Regulation and Its Reform: What Have We Learned?

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  • Dennis W. Carlton
  • Randal C. Picker

Abstract

Since the passage of the Interstate Commerce Act (1897) and the Sherman Act (1890), regulation and antitrust have operated as competing mechanisms to control competition. Regulation produced cross-subsidies and favors to special interests, but specified prices and rules of mandatory dealing. Antitrust promoted competition without favoring special interests, but couldn't formulate rules for particular industries. The deregulation movement reflected the relative competencies of antitrust and regulation. Antitrust and regulation can also be viewed as complements in which regulation and antitrust assign control of competition to courts and regulatory agencies based on their relative strengths. Antitrust also can act as a constraint on what regulators can do. This paper uses the game-theoretic framework of political bargaining and the historical record of antitrust and regulation to establish and illustrate these points.
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Suggested Citation

  • Dennis W. Carlton & Randal C. Picker, 2014. "Antitrust and Regulation," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 25-61, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:12565
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nishida, Mitsukuni & Gil, Ricard, 2014. "Regulation, enforcement, and entry: Evidence from the Spanish local TV industry," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 11-23.
    2. Dennis W. Carlton, 2007. "Does Antitrust Need to be Modernized?," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 155-176, Summer.
    3. Howell, Bronwyn, 2008. "The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets," Working Paper Series 4002, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Fatih Cemil Ozbugday, 2013. "Individual Exemption Applications and Their Assessment: Lessons from the Competition Law Change in the Netherlands during the 1990s," Business and Management Research, Business and Management Research, Sciedu Press, vol. 2(4), pages 148-164, December.
    5. Joan Ramon Borrell & Juan Luis Jiménez, 2008. "The drivers of antitrust effectiveness," Hacienda Pública Española / Review of Public Economics, IEF, vol. 185(2), pages 69-88, July.
    6. Morkre, Morris & Spinanger, Dean & Tran, Lien, 2008. "Are unfair import laws unfair to developing countries: evidence from US antidumping actions 1990 - 2004," Kiel Working Papers 1438, Kiel Institute for the World Economy (IfW Kiel).
    7. repec:vuw:vuwscr:19104 is not listed on IDEAS
    8. Dennis W. Carlton, 2010. "Mergers in Regulated Industries: Electricity," Chapters, in: Abel M. Mateus & Teresa Moreira (ed.), Competition Law and Economics, chapter 9, Edward Elgar Publishing.
    9. Wisuttisak, Pornchai, 2012. "Regulation and competition issues in Thai electricity sector," Energy Policy, Elsevier, vol. 44(C), pages 185-198.
    10. Francesc Trillas Jané, 2016. "Behavioral Regulatory Agencies," Working Papers wpdea1606, Department of Applied Economics at Universitat Autonoma of Barcelona.
    11. repec:vuw:vuwscr:19134 is not listed on IDEAS
    12. Christian Jaag & Urs Trinkner, 2011. "A General Framework for Regulation and Liberalization in Network Industries," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 3, Edward Elgar Publishing.
    13. Howell, Bronwyn, 2009. "Politics and the Pursuit of Efficiency in New Zealand's Telecommunications Sector 1987-2008," Working Paper Series 19134, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    14. Brouwer, E. & Ozbugday, F.C., 2011. "Competition Law, Antitrust Immunity and Profits : A Dynamic Panel Analysis," Discussion Paper 2011-038, Tilburg University, Center for Economic Research.
    15. Howell, Bronwyn, 2008. "From Competition to Regulation: New Zealand Telecommunications Sector Performance 1987-2007," Working Paper Series 19104, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    16. Dennis W. Carlton & Ken Heyer, 2008. "Appropriate Antitrust Policy Towards Single-Firm Conduct," EAG Discussions Papers 200802, Department of Justice, Antitrust Division.
    17. Carletti, Elena & Hartmann, Philipp & Ongena, Steven, 2007. "The economic impact of merger control: what is special about banking?," Working Paper Series 786, European Central Bank.
    18. Howell, Bronwyn, 2008. "From Competition to Regulation: New Zealand Telecommunications Sector Performance 1987-2007," Working Paper Series 4003, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    19. Howell, Bronwyn, 2009. "Politics and the Pursuit of Efficiency in New Zealand's Telecommunications Sector 1987-2008," Working Paper Series 4032, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    20. repec:vuw:vuwscr:19103 is not listed on IDEAS
    21. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.
    22. Howell, Bronwyn, 2008. "The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets," Working Paper Series 19103, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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    More about this item

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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