The Efficiency Paradox

Eleanor M Fox

Fox, Eleanor M, ‘The Efficiency Paradox’ in R Pitofsky (ed), ‘How the Chicago School Overshot the Mark: The effect of conservative economic analysis on US antitrust’ (Oxford, 2008) 77

NYU Law and Economics Research Paper No. 09-26

(July 8, 2009)

Abstract

The article assumes arguendo that efficiency is the sole goal of antitrust. It then observes that how to achieve efficiency by applications of antitrust law is not obvious; that there are various routes towards attempting to achieve efficiency, and Chicago School advocates have picked one based on a principle of non-intervention rather than one based on a principle of trust in rivalry and open markets. The article shows how application of the non-intervention principle protects dominant firms from the competition of their rivals and in that connection deprives the market of efficiencies. Robert Bork argued in THE ANTITRUST PARADOX: in the name of competition, antitrust harmed competition. Professor Fox now argues: in the name of efficiency, conservative advocates and jurists harm efficiency. This is The Efficiency Paradox of her title.