Table of Contents

Competition Policy and the Economic Approach

Competition Policy and the Economic Approach

Foundations and Limitations

Edited by Josef Drexl, Wolfgang Kerber and Rupprecht Podszun

This outstanding collection of original essays brings together some of the leading experts in competition economics, policy and law. They examine what lies at the core of the ‘economic approach to competition law’ and deal with its normative and institutional limitations. In recent years the ‘more economic approach’ has led to a modernisation of competition law throughout the world. This book comprehensively examines for the first time, the foundations and limitations of the approach and will be of great interest to scholars of competition policy no matter what discipline.

Chapter 14: Introducing More Features of Real Life into the Economists’ World of Theoretical Models – Comments on Justus Haucap, Bart Wilson and Christoph Engel

Andreas Fuchs

Subjects: economics and finance, competition policy, law - academic, competition and antitrust law


Andreas Fuchs 1. INTRODUCTION Each of the three profound and enlightening chapters in this part contains many interesting features which would deserve closer attention. However, it is not up to me as a lawyer to deal with the general foundations and specific limitations of behavioural, experimental, and New Institutional economics, or to go into any details with regard to formal economic models. Therefore, I confine myself to some rather general remarks, and concentrate on just one question looking through the lawyer’s lense: what is the possible use of these modern economic approaches for legal antitrust thinking? But let me start with a little story. For thousands of years everyone in Europe was convinced that swans are always white. There was indubitable empirical evidence to sustain this belief. Then, in the eighteenth century when Europeans explored Australia, some adventurers found an unknown kind of animal that had all the features of a swan but was black. How do you cope with the discovery of a black swan? You may stick to your definition that a swan has to be white, and invent a different name for the new animal, e.g. ‘blan’. But you may also give up your firm belief that the only swans existing are white, and re-define the notion of ‘swan’ so as to include the possibility of a black swan. In a metaphorical sense, ‘black swans’ are discovered all the time: a single observation of an unexpected fact can falsify a statement or firm belief derived from thousands...

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