Antitrust Policy Planning and Industry Performance Evaluation

• Author: Steven R. Cox
• DOI: 10.1177/0003603X7401900303
• Published date: 01 September 1974
• Date: 01 September 1974
• Subject Matter: Article

ANTITRUST

POLICY

PLANNING

AND

INDUSTRY

PERFORMANCE

EVALUATION

by

STEVEN

R.

COX·

In

The Nader Report on the Federal Trade Oommission,

the

FTC

is criticized

for

allocating resources to the prosecu-

tion of trivial cases

and

for failing to establish asystem of

priorities by which resources would be devoted to cases of

greatest public importance.' One result of

that

criticism has

been the increased attention given by the

Federal

Trade

Com-

mission to the construction of a policy planning model. The

theoretical purposes of such a model

are:

(1) to identify

problem industries

and

rank

them according to their market

performance; (2) to estimate the potential gain in improved

economic performance, given some probability of successful

case prosecution; and (3) to determine manpower needs for

various success probabilities.

In

short, a policy planning

model tries to give policy makers some estimate of the benefits

and costs of alternative budget and manpower allocations.

Of crucial importance to such models is some measure of

industry performance; but can industries be distinguished

and ranked on performance criteriaT

That

is the question

central to this paper.

Industry

performance is multidimensional. Evaluating an

industry's overall performance, therefore, involves first evalu-

ating

that

industry's performance on various sub-dimensions.

Allocative efficiency

and

technological progress are two such

sub-dimensions.

But

what constitutes a monopoly profit or

•Assistant Professor of Economics, Arizona State University,

Tempe.

AUTHOR'S

NOTE:

The views expressed in this paper are the au-

thor's solely.

1See Edward F. Cox, Robert C. Fellmeth, and John E. Schulz,

The Nader Report on the Federal Trade Commission (New York:

Grove Press, Ino., 1969), pp.

43-49.

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