Limiting Product Choice: Innovation, Market Evolution, and Antitrust
Journal of Public Policy & Marketing
This article reports that conventional antitrust analysis focuses almost exclusively on static economic efficiency rather than dynamic efficiency. This focus is contrary to that of economists who have long argued that consumer welfare is advanced most directly by innovation and technological advancement, rather than the degree of efficient allocation of resources at one point in time. Traditional antitrust analysis concedes the importance of innovation. Innovation is important because it enhances consumer choice. Economists argue that antitrust analysis should place more emphasis on preserving non-price competition such as innovation and product variety and quality to ensure that "a meaningful range of options is made available to consumers." To better examine dynamic efficiency concerns, this article proposes that antitrust analysis include the location of the market along a dynamic market evolution model. Examining ten product strategies in light of this dynamic model provides new insight.
Antitrust and Trade Regulation | Economics | Marketing
Petty, Ross D. 2002. "Limiting Product Choice: Innovation, Market Evolution, and Antitrust." Journal of Public Policy & Marketing 21, no. 2: 269-274.