Some Orders of Magnitude

Abstract

The nature of the social welfare trade-off which is central to the antitrust debate has been outlined in purely theoretical terms in Sections 4 and 5 of this paper. What are the practical implications for the policy debate? Williamson [84, 85] derived some guideline orders of magnitude from the ‘naïve’ trade-off model between scale economies and allocative inefficiency. Although these guidelines exclude X-inefficiency considerations, the latter are easily incorporated by treating cost savings as net of X-inefficiency.