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April 18, 2016
Academic Advisor Abraham Wickelgren Quoted in Law360 Article on Economists’ Perspective of Antitrust Cases

Brattle Academic Advisor Abraham Wickelgren, an antitrust law professor at the University of Texas Law School, was quoted in a recent Law360 article, “5 Things That Bother Economists About Antitrust Law,” discussing what economists would like to change about how antitrust cases are litigated and judged.

In the article, Prof. Wickelgren shares his perspective on three of the five issues addressed. First, he discusses how market definition can distract from bigger questions that should be answered in an antitrust claim. He notes that, “lawyers in antitrust cases sometimes spend huge amounts of time and resources debating market definition and other proxies, even though those proxy questions can be impossible to answer with certainty.” He suggests that it would be advantageous to first determine whether something is anti-competitive or not.

Prof. Wickelgren then provides insight on the issue that the link between profits and prices becomes distorted. In antitrust cases, companies seeking merger approval often use critical-loss analysis to claim that higher premerger profit margins indicate a lower risk of post-merger price increases. However, Prof. Wickelgren explains this claim inaccurately links profit margins to prices.

Lastly, Prof. Wickelgren points out the importance of efficiency arguments and how efficiencies can provide a non-anti-competitive explanation for the deal. “From an economic perspective, merging companies must have had some incentive to enter the deal,” notes Prof. Wickelgren. “So, if the companies don’t present a narrative emphasizing their efficiency incentives, they might have a hard time convincing economists that they weren’t motivated by some expected increase in market power.”

Abraham L. Wickelgren
Academic Advisor
University of Texas Law School
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