Antitrust and Marginal Revolution

Bryan Caplan asks under what conditions would the antitrust authorities prosecute me and Tyler?  When we raise our price?  When we require MR readers to promise not to read any other blogs?  When we merge with a competitor?  Or when we predate by producing so many high-quality posts at such a low price that it forces other blogs out of business?  (heh, isn't that what we are doing right now?)

As Bryan points out, raising price wouldn't cause legal problems but all the other actions would.  Why?


If a substantial amount of blogs started charging, and marginal revolution didn't. And, if those other blogs started making formal complaints, then the authorities would bring action. It would help if the blogs that started charging were owned by media companies.

The simple answer is that antitrust is not, has not ever been, and will not ever be about protecting consumers from the ineffeciencies of "monopoly". Rather it is about protecting incompetent competitors from same. Essentially it was regulatory-capture'd on day 0.

FYI, the question isn't really about MR - it's about antitrust policy. The assumption is that MR does have market power - substitute some other firm if you like.

Noah Yetter gets it in 1. The purpose of regulation is usually to protect politically favored companies from competition, because businesses HATE competition.

Feel free to pay me to not read Brad Delong's blog. I promise not to tell anyone, least of all the Feds.

Of course, the most likely resolution would be your merger, cross licensing of intellectual property, or some similar agreement that provides mutual benefit plus greater control of your market relative to others.

Another reason not to police high pricing in an of itself is the administrative costs of determining what constitutes "high" pricing are themselves extremely high. First off, the term is ambiguous--what is high? Second, that ambiguity creates uncertainty, and would as a result stifle price flexibility. If you stifle price flexibility, you stifle the fundamentals of a market: price increases reduce demand and induce greater supply. If you take away those price signals then you're likely to end up with a market that oversupplies some goods and undersupplies others.

I was curious so I did a quick search. Apparently the Sherman Antitrust act passed unanimously in the House and only one Senator voted against it. I can't find who voted against it though. Anyone resourceful enough to know where to find this info? I'm curious.

There seems to be a cognitive dissonance here. I would agree with Matt Matson.

In fact, when I read the list of things that would (or would not) cause antitrust action, I thought "That's sane", and not "That's absurd".

I guess people interpret these things the way they want to interpret it, in order to get to the results that they desire. (People unfortunately has to include myself, I guess.)

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