The New Institutional Economics is a success story. At least five Nobel laureates can be counted as belonging to it (Kenneth Arrow, Ronald Coase, Friedrich Hayek, Douglass North, and Herbert Simon). Its competition theory branch, transaction cost economics, has made considerable impact on U.S. antitrust policy. It has, e.g., led to a fundamental modification of the evaluation of vertical as well as geographical restraints which were shown to be welfare enhancing under specific circumstances (Williamson 1985, chapter 14 and passim). In Europe, however, its effects on competition policy have been rather marginal. We therefore decided to present this approach in a little more detail than the other approaches dealt with in this chapter.
Making European Merger Policy More Predictable
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