NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Antitrust and the Not-For-Profit Sector

Tomas J. Philipson, Richard A. Posner

NBER Working Paper No. 8126
Issued in February 2001
NBER Program(s):   HE   PE

Although the not-for-profit sector contributes greatly to aggregate output in many industries, there is little explicit analysis of the consequences of applying antitrust policy in this sector. This paper argues that the same incentives to collude exist in the non-profit sector as in the for-profit sector and that therefore, since competition is socially valuable regardless of the particular objectives of producers, the fact that antitrust law does not distinguish between the two sectors is efficient. The similarity in incentives derives from the fact that altruistic firms benefit from exploiting market power even when they would price below cost without regard to competition. Although the legal regulations governing the nonprofit sector limit the degree to which profits can be distributed, and therefore seek to reduce rents in a similar manner to antitrust laws, this nondistribution constraint does not obviate the need for antitrust in that sector. The argument for uniform antitrust doctrine in the two sectors extends to the exemptions from antitrust as well. In particular, patents (lawful monopolies intended to create incentives for innovation) stimulate innovation in the nonprofit sector only when they enable market power to be exploited, just as in the for-profit sector, and so the patent exemption from antitrust should be as broad in the nonprofit sector.

download in pdf format
   (176 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (176 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8126

Published: Tomas J. Philipson & Richard A. Posner, 2009. "Antitrust in the Not-for-Profit Sector," Journal of Law & Economics, University of Chicago Press, vol. 52(1), pages 1-18, 02. citation courtesy of

Users who downloaded this paper also downloaded these:
Philipson and Posner w12132 Antitrust in the Not-For-Profit Sector
Malani, Philipson, and David Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation
Horwitz and Nichols w13246 What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix
Scott Morton w5663 Entry and Predation: British Shipping Cartels 1879-1929
Philipson and Posner w7423 The Long-Run Growth in Obesity as a Function of Technological Change
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us