Suchergebnisse

The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating procompetitive effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior. But which of these myriad justifications are valid? To leading jurists and scholars, this has remained an "open question," even an "absolute mystery." Examination of the relevant case law reveals multiple competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is vital to a properly functioning antitrust enterprise. This Article provides answers and clarity. It identifies the market failure approach to analysis as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. Most importantly, the Article identifies the proper, three-step method for assessing procompetitive justifications. This three-step analytical framework increases transparency and rigor, minimizes errors, and maximizes welfare.

The modern field of study into hindsight bias was launched by Baruch Fischhoff. Fischhoff provided his research subjects with a primer on the 1810s conflict between British forces and Nepalese Gurkhas near Northern India. He suggested four possible outcomes: British victory, Gurkha victory, a peace settlement, and a military stalemate with no peace settlement. The subjects were then divided into five groups. One group was given no information about the ultimate outcome of the conflict. Subjects in each of the remaining four groups were told that one of the four outcomes had, in fact, occurred. The subjects were then asked to assess the probability of each of the outcomes at the time that the conflict began. On average, the members of each group thought that the outcome that they had been told occurred was the most likely outcome a priori, even though they had been instructed to ignore what they "knew" about the ultimate outcome. Fischhoff referred to this phenomenon as "creeping determinism": the effect that being told "an outcome's occurrence consistently increases its perceived likelihood" before the fact. Subsequent studies confirmed his earlier results. Fischhoff's studies effectively created the field of research on hindsight bias.