Dynamic competition research offers a plethora of new insights that could change antitrust policy and antitrust enforcement. However, it is not clear whether consistent application of dynamic insights would lead to greater or less antitrust activity. Some scholars see concepts like path dependence and unique corporate capabilities as additional sources of market imperfections that could be corrected by government action. Others view the potential for entrepreneurial innovation as a sign that monopolistic exploitation carries the seeds of its own demise; monopoly profits create attractive opportunities for alert firms who can dethrone the monopolist. For the former group, dynamic competition is something to be nurtured by careful intervention; for the latter group, dynamic competition means that unhampered markets are even more resilient than previously thought.

Before proceeding from research to policy, it would be helpful to clarify precisely what role dynamic considerations could take in antitrust proceedings. Is dynamic competition simply an additional factor that should be considered, along with more traditional static efficiency, or should analysis of dynamic competition completely displace static considerations? Here are some tentative thoughts on each option.

DYNAMIC COMPETITION AS AN ADDITIONAL FACTOR

If dynamic competition analysis supplements static efficiency analysis, the principal effect might be to create an additional “safe harbor” for firms that appear to have significant market power.