By methodically evaluating conventional wisdoms, our formal models from Part I of this book exposed an important source of influence on competition policy that less scientific commentaries often miss – like producers, consumers also have an incentive to seek political advantage and, when that advantage is realized, tend to favor themselves at others’ expense. This implication follows from a consistent treatment of micro-motivations for individual choices, whether those choices are made in firms where individuals produce or in marketplaces where individuals consume. Everyone has an interest in institutions that favor themselves, even if those institutions create negative-sum games for society.
At least in principle, then, the problem of too much power rests with consumers as well as with producers. Moreover, the statistical evidence developed in Part I suggests that, rather than being an abstract possibility, at least one important economic sector is underperforming because democratic...
KeywordsEconomic Performance Market Power Competition Policy Insurance Sector Term Limit
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