The Social Welfare Function
The essential problem in assessing antitrust as a public policy instrument is to decide whether social welfare would be higher if an antitrust policy were to be implemented than if it were not. Such a decision is impossible until the value premises upon which social welfare is to be measured have been determined. The traditional starting-point in the economic theory of public policy is the Pareto principle, and it is worth outlining the value premises which underpin this approach before modifying the principle itself in line with recent discussions of antitrust policy.
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