Comment

• Author: Alannah Orrison
• Published date: 01 March 1997
• Date: 01 March 1997
• DOI: http://doi.org/10.1177/0003603X9704200103
• Subject Matter: Symposium: Economics of Antitrust Enforcement

The Antitrust Bulletin/Spring 1997

Comment

BY ALANNAH ORRISON*

29

In this article, David Glasner presents both a discerning, inves-

tigative exposition of two recent cases and a rather disturbing

exposition of economic analysis gone awry.

Although the main question he raises seems to be whether the

capacity-diversion defense is compelling, several criticisms spe-

cific to the handling of these cases are made along the way. Some

are general, against the logic of the defense itself; some are tech-

nical, based on the actual work done in the cases. I take the main

criticisms to be these:

First, in both cases, that the defense makes it extremely diffi-

cult to demonstrate asituation in which price discrimination could

occur, making the construction of the narrow market

"no

more

than a formal exercise."

Second, atechnical

point-that

the Owens-Illinois opinion ran

afoul

of

a

semantic

confusion

over

the

meaning

of

the

word

"inelastic," resulting in a mis-measure

of

the capacity diversion

sufficient to defeat adiscriminatory price increase.

*Professor of Economics, Saddleback College, Mission Viejo, CA.

© 1997by Federal Legal Publications. Inc.