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Home > Journals > Michigan Law Review > MLR > Volume 80 > Issue 8 (1982)

 

Abstract

To assist courts and litigants in developing and utilizing information on mobility factors in a meaningful manner, I have attempted in this Article to outline a basic approach for analyzing the competitive and efficiency significance of mobility factors in a litigative context. In Part I, I lay the necessary foundation: discussing the importance of mobility factors in accepted economic theory, explaining the sources of the current confusion and controversy about "entry barriers" and deriving from the debate areas of fundamental agreement among economists. Building on this common ground, I develop in Part II a basic approach to consideration of mobility factors in structural cases. Examining current legal standards applicable to monopolization and merger cases, I demonstrate that, in most types of structural cases, the issues that should be determinative relate primarily, if not exclusively, to mobility factors. Then, bringing together the basic insights of the two major schools of economic thought, I construct a simplified framework for ascertaining the competitive significance of individual mobility factors. By focusing attention on determining which of three possible effects a mobility factor may have, the analytical framework should assist courts and litigants in addressing the crucial issues: how a particular mobility factor enables major incumbents to maintain prices above a competitive level and to what extent it enables them to do so. Part III explains how mobility factor analysis can be used in litigation to develop rough estimates of the degree and duration of market power as well as estimates of the increased efficiencies that may result from a merger. Part III also demonstrates that, by using a disciplined approach to mobility factor analysis from the pre-trial stage, courts can better manage and streamline litigation.

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