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Academic Articles Awards > General Antitrust

On the inefficiencies of efficiency as the single-minded goal of antitrust

Albert A. Foer, Antitrust Bulletin, Summer 2015

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Readers’ vote will close on February 15, 2016. Readers’ vote will allow you to nominate 1 article for each of the Awards, i.e., 10 Academic articles, 10 Business articles, and the best Soft Laws. The readers’ short-list of Academic and Business Articles will be communicated to the Board together with the 20 articles nominated by the Steering Committees. The Board will decide on the award-winning articles. Results will be announced at the Awards ceremony to take place in Washington DC on the eve of the ABA Antitrust Spring Meeting on April 5, 2016.

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This article provides a skeptical look at the role of "efficiency" in antitrust analysis. It begins by discussing how various types of efficiency may be in conflict, such that the concept is actually less scientific or useful than often thought. The article asks, What economic considerations are excluded from today’s antitrust analysis? This leads to a discussion of political, social, and non-efficiency economic values; externalities; and three types of inefficiencies that may be caused by the single-minded hunt for efficiencies: X-inefficiency; diseconomies of scale, scope, and coordination; and the "too-big-to-fail" problem. Finally, the article describes some challenges facing reform proposals, including problems of prediction and quantification. The conclusion argues that the efficiency goal is fraught with problems and that a broader concept needs to take into account inefficiencies as well as efficiencies.

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