The May 2 issue of The Economist has an article on antitrust (p.62-4) with a
cartoon contrasting the "Chicago School" with the "Real World School" and
quotes several economists who are skeptical of "Chicago Orthodoxy" on
antitrust.  In particular, according to the article, the idea of "predatory
pricing" has a new lease on life due to "connected markets" (Microsoft is
mentioned), and some markets (air travel) are no longer thought to be
"contestable" due to large sunk costs.

Would you describe this as an instance of your "2% rule" (as in "you can find
2% of economists who don't favor free trade"), or could something more
serious be going on?

Even more interesting is the article's mention of two recent antitrust cases
in which detailed sales information (from point-of-sale scanners) was used to
prevent mergers even though the industries seemed highly competitive.  For
example, in the case of Staples and Office Depot, Staples was found to have
lower prices in cities where Office Depot had a store than in other cities.

If "rifle-shot" analyses are now possible, the argument that antitrust laws
have been economically harmful overall might be getting the flavor of the
"sunk-cost" fallacy.

Gordon Sollars
gsoll...@virginia.edu

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