Can Economists Agree, or are Some More Agreeable Than others?

• Author: David K. Round,John J. Siegfried
• Published date: 01 September 1994
• Date: 01 September 1994
• DOI: http://doi.org/10.1177/0003603X9403900305
• Subject Matter: Economic

The Antitrust Bulletin/Fall 1994

Can economists agree, or are some

more agreeable than others?

BY DAVID K. ROUND* and JOHN J. SIEGFRIED**

I.

Introduction

753

Economics involves the analysis of how choices are made between

competing alternatives. While the basic economic logic behind

such choices is widely agreed, economists are noted, and often

berated,

for

their

frequent

inability

to

emerge

with

similar

"choices" when confronted with a common problem, data set or

policy initiative. This disposition to disagree has not passed unno-

ticed by politicians, historians, sociologists, lawyers and judges

(especially the latter, when confronted by opposing expert wit-

nesses in antitrust cases, one arguing that the conduct at hand is

*

Associate

Professor

of

Economics,

University

of

Adelaide,

Adelaide, South Australia.

**

Professor

of

Economics,

Vanderbilt

University,

Nashville,

Tennessee.

AUTHORS'

NOTE: The

research

on

which

this

article

is

based

was

conducted

while Siegfried was Visiting Professor

of

Economics at the

University

of

Adelaide.

© 1994 by Federal Legal Publications, Inc.

754

The antitrust bulletin

detrimental to the competitive process, the other stressing that the

conduct epitomizes the functioning of a competitive market).

While there may well be "lies, damned lies and economics" (with

apologies to Disraeli, whose epithet originally referred to eco-

nomics' complementary cousin, statistics), economists have not

been unaware of their shortcomings in this respect. In one

of

his

more famous remarks, penned in the days when sexist language

was acceptable, George Stigler once quipped that

[t]o determine whether any industry is workably competitive

...

simply have a good graduate student write his dissertation on the

industry and render a verdict. It is crucial to this test, of course, that

no second graduate student be allowed to study the industry.'

In this article we explore the consequences of a second (and

third, and fourth, and more)

evaluation

of

competition

in an

industry. We report the results of a survey of twenty-two Aus-

tralian economists, who were asked to assess the extent of compe-

tition in 114 Australian industries over four different time periods.

This sample

of

economists was supplemented by a survey of

twenty economic and business historians and lawyers, chosen as

respondents because of their research or professional interests in

the fields of markets, competition or business.

II. Background

The survey was conducted in order to judge the state of com-

petition in those Australian industries in which originated the for-

tunes of a group of people identified as the wealthiest Australians

in 1990 by two weekly Australian business magazines, Australian

Business and Business Review Weekly.2 Rather than judging the

Stigler, Discussion

of

Papers on the Report

of

the Attorney Gen-

eral's Committee on Antitrust Policy, 46

AMER.

ECON.

REV.

504, 505

(May 1956).

See Siegfried &Round, How Did the Wealthiest Australians Get

So Rich? (1993) (unpublished paper).