Preface

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PREFACE

This book is about the power and usefulness of econometric analysis

in the practice of antitrust. The use of econometrics—and empirical

analysis generally—reflects the increasing reliance by the courts and by

the antitrust agencies on economic methods and testimony in antitrust

cases.

Because antitrust analysis has become more sophisticated, it is likely

that sometime in his or her career an antitrust attorney will have to work

with an economist to develop an empirical study that may involve

econometric methods, prepare an argument or brief that incorporates

facts that are derived from an econometric study, or cross-examine an

economic expert on an econometric study that he or she may have done.

The increasing use of econometric analysis has created a knowledge

gap. For many attorneys, particularly those who do not have much or any

background in mathematics or statistics, reading and interpreting an

economic expert report or developing empirical evidence that may

require econometric analysis can be daunting and challenging. We

therefore began this book to bridge this gap by making econometrics

approachable and understandable for non-economists.

We soon realized that there was another gap that we needed to fill—

a practical gap in understanding that may limit the ways in which

econometric analyses are applied in practice. Put differently, once one

understands the power and value of an econometric analysis, it is easier

to see the additional opportunities and applications for its use,

particularly with greater access to more relevant and reliable data

through discovery. We therefore wanted the book to demonstrate the

power of econometric analysis by showing how econometric methods

have been and can be applied to address practical issues in antitrust (e.g.,

damages, merger analysis, and class certification).

We have designed and organized this book to give antitrust attorneys

a better feel and understanding of (a) why econometric techniques are

useful, (b) the types of applications in which statistics and econometrics

can be and should be applied, (c) the potential pitfalls in the use of these

methods, (d) how econometric methods have been used in the courtroom,

and (e) the evidentiary and discovery issues that often arise in connection

with econometric work that is done in the context of a merger review or

litigation. More broadly, Chapters 1 through 7 aim to describe the

concepts that are behind an econometric study, as well as the data that