| Abstract: | Economists testifying in antitrust cases often encounter thedemand by attorneys and judges for "bright-line" tests –simple rules supposedly based on economic analysis. This paperargues that, although such tests can have their uses, they arevery likely to lead to error without a clear understanding ofthe purposes of the tests and the economics behind them. Issuesdiscussed include: market definition, market share, the roleof profits, and, especially, anti-competitive conduct (includingthe Areeda-Turner) test for predatory pricing. Examples aredrawn from actual court cases (mostly in the U.S.), in manyof which the author was an expert witness. The best known ofthese was the U.S. case against Microsoft, but there are manyothers. |
