The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust

By Mark Glick |

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In The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust, a working paper for the Roosevelt Institute, University of Utah economics professor and antitrust scholar Mark Glick examines why the New Brandeisians are correct to reject the consumer welfare (CW) standard. Delving deeper—and pushing antitrust scholarship forward—he argues that the CW or total welfare standard was theoretically flawed and acutely insufficient from its inception.

Ultimately, Glick demonstrates that, since its adoption in the 1970s, the CW standard never offered a coherent goal for antitrust; what antitrust regulators and enforcers mean by “consumer welfare” was, and remains, unclear and contradictory. For example, the lack of a coherent definition of CW undermines many of the standard antitrust theories such as the Williamson Tradeoff for merger analysis. On merits alone, independent of its economic impact, the consumer welfare standard should be rejected.

An extended version of this paper is scheduled to appear in The Antitrust Bulletin.

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Mark Glick is a professor of economics at the University of Utah. This is part one of a two part project on the New Brandeis School of Antitrust. The second part will consider the empirical evidence, the historical interpretation and the policy suggestions of the New Brandeisians.