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The overwhelming importance of the structure-conduct-performance paradigm for the development of competition policy was pointed out in chapter II. According to that paradigm, the structure of a market determines the outcome to be expected.
It has been observed that expertise in a number of basic production techniques can at times enable firms to enter familiar markets without having to invest much in terms of learning costs.
After having looked at policy changes that led to a reduction in international interaction costs and that made globalisation thus possible, we now turn to have a look at economic and technological factors that have had similar effects.
We have just seen that – under certain conditions – the representatives of the Chicago approach would not be intrigued by high market shares of a limited number of competitors.
The Chicago approach has been heavily criticised on various grounds. Some of the points are just mentioned here: – The models are still built on the concept of perfect competition. More recent developments are not sufficiently taken into account;
Instead of aiming for a variety of – partially incompatible – goals as “Harvard” had done, “Chicago” radically reduced complexity by focusing on one single goal, efficiency. Market structure did not play any role – as long as outcomes were efficient.
What was to become the Chicago School of Antitrust started out as a critique against the concept of workable competition that was summarised in the last section.
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