Welfare Standards and Merger Analysis: Why Not the Best? (reprint)

The author argues for using the total welfare standard, rather than the more commonly employed consumer welfare standard. In doing so, Heyer responds to three broad objections that have been raised. One is that use of a total welfare standard conflicts with antitrust law, or at least with legal precedent. A second is that employing a total welfare standard would clearly be more costly for antitrust agencies than employing one or another flavor of a consumer welfare standard. A third is that the total welfare standard ignores important distributional considerations—considerations that are better treated under some form of consumer welfare standard. Each of these objections is evaluated, and ultimately found unpersuasive.

Reprinted from the CPI Journal, Autumn 2006, Volume 2 Number 2