Question

Read the article “A Brief History of Mergers and Antitrust Policy” by Edward Herman, what are two reasons in support of antitrust policy? What are two arguments in opposition to antitrust policy put forth by the “Chicago school”? Thank you.

Answer 1

Antitrust activity by government expect that shopper interests are served best when numerous organizations contend to offer every item or administration. Restraining infrastructures, or tight oligopolies (when a couple of firms are predominant, and confront little danger of section by new organizations), are destructive in a few ways. To start with, without the train of rivalry, they have less strain to limit costs, and may work inefficiently. Second, they limit yield so as to keep costs and benefits high. Third, they may smother specialized advance, on the grounds that their market control decreases the motivating force for both themselves and pariahs to develop. At long last, enormous partnerships can apply awesome political power, in this manner undermining majority rule government.

Two arguments can be

These hypotheses, numerous leaving the "Chicago School" (the financial aspects division at the College of Chicago), experience the ill effects of over-rearrangements, a solid imbuement of belief system, and absence of experimental help. Mergers frequently are roused by factors other than upgrading effectiveness, for example, the want for syndication control, realm building, cutting charges, enhancing stock esteems, and even as a cover for poor administration, (for example, when the seriously run U.S. Steel purchased control of Marathon Oil).