This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers between competitors, and monopolization. In each area, we select the most relevant portions of current economic knowledge and use that knowledge to critically assess central features of antitrust policy. Our objective is to foster the improvement of legal regimes and also to identify topics where further analytical and empirical exploration would be useful.
We are grateful to Jonathan Baker for extensive and very valuable comments, Stephanie Gabor, Jeffrey Harris, Christopher Lanese, Bradley Love, Stephen Mohr, Andrew Oldham, Peter Peremiczki, Michael Sabin, and Kevin Terrazas for research assistance, and the John M. Olin Center for Law, Economics, and Business at Harvard University for financial support. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.