Two Comments on the Definition of Contrived Oligopolistic Conduct

• Published date: 01 December 2023
• DOI: http://doi.org/10.1177/0003603X231201206
• Author: Thomas Wiseman
• Date: 01 December 2023
• Subject Matter: Articles

https://doi.org/10.1177/0003603X231201206https://doi.org/10.1177/0003603X231201206

The Antitrust Bulletin

2023, Vol. 68(4) 608 –617

© The Author(s) 2023

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DOI: 10.1177/0003603X231201206

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Article

Two Comments on the Definition of

Contrived Oligopolistic Conduct

Thomas Wiseman*

Abstract

Prof. Markovits provides a verbal definition of anticompetitive contrived oligopolistic conduct

that is mathematical in its precision. I highlight two questions arising from that definition. The first

question involves an ambiguity about how firms’ beliefs about each others’ potential reactions

to their moves affect how firms evaluate the profitability of those moves. The second question

regards whether and in what circumstance strategic ignorance—a firm’s decision to avoid relevant

information in order to influence the behavior of its rival—should be considered anticompetitive.

The increasing use of artificial intelligence pricing algorithms highlights the practical importance

of both questions.

Keywords

dynamic anticompetitive conduct, algorithmic pricing

I. Introduction

Richard Markovits’s two-volume book on Welfare Economics and Antitrust Policy1 offers an authorita-

tive overview of the state of the art in (1) tools to analyze the economic, moral, and legal impacts of

various forms of firm conduct, (2) the application of those tools to specific categories of antitrust-law-

related firm conduct, and (3) the relevant coverage of U.S. and E.U. antitrust and competition law. The

book will be useful to both economists and legal scholars separately, and it makes what may be even a

greater contribution in facilitating cross-disciplinary research. It provides a rigorous-enough grounding

in both economic reasoning and legal analysis that scholars trained in one field will be able to identify

and address questions in the other.

For mathematical economists and game theorists, the book provides an access point at an

advanced level for how legal scholars look at antitrust issues. It lays out a coherent framework

underlying how antitrust policy is applied in the courts. Furthermore, it offers a guide to the open

questions that legal scholars consider important. If the book did nothing else, it would generate a

long list of interesting aspects of antitrust policy that economic analysis might usefully contribute

*Department of Economics, The University of Texas at Austin, Austin, TX, USA

Corresponding Author:

Thomas Wiseman, Department of Economics, The University of Texas at Austin, Austin, TX 78712, USA.

Email: wiseman@austin.utexas.edu

1201206ABXXXX10.1177/0003603X231201206The Antitrust BulletinWiseman

research-article2023

1. RichaRd S. MaRkovitS, WelfaRe econoMicS and antitRuSt Policy-vol. i (Springer Books, 2021); RichaRd S. MaRkovitS,

WelfaRe econoMicS and antitRuSt Policy-vol. ii (Springer Books, 2022).