Antitrust: Transaction Costs Perspective

This dissertation develops a theoretical framework on antitrust by transaction costs after an overview on antitrust theory. There are efficiency market power and non-efficiency market power. Stemming from transaction costs as the result of asset specificity, non-efficiency market power has its inevitability on the market. When transaction costs as well as asset specificity is not a problem, the spontaneous market is enough for the governance of market power; when the problem transaction costs as well as asset specificity brings about is something serious, the governance of market power needs antitrust law; and when the problem is of extreme severity, the governance of market power needs government's direct regulation. Governing market power effectively lies on analyzing a series of transactions related with the power, and thus selecting an appropriate mode or a set of appropriate modes, which leads to maximize benefits minus costs of related transactions. Our nation's antitrust activities haven't been developed in deed all the time because of some reasons, which aren't on the ground within our framework. As a result of transaction costs, there are inevitably imperfect places in the market. While antitrust regulation is just to perfect these places and to protect and enhance the market competition, and thus antitrust regulation is also inevitable in the market economy. Further more, we find non-efficiency market power serious to some extent by empirical studies on China's manufacturing industry and auto industry, which is also testifying the necessity and urgency of antirust regulation. Factor supporting antitrust regulation is not enterprise's scale but transaction costs, enough of which will engender serious problems of entry barrier and non-efficiency market power. So that good antitrust regulation is not to impede the development of scale economy, but to promote the healthy development of it. Not only does transaction costs support the antitrust regulation, but it also makes enterprise be free of antitrust punishment, as the result of enterprise's conduct changing the structures of asset specificity and transaction costs which finally enhances the transaction and competition of market. Applying the method of transaction costs on the objective and process of antirust regulation's concrete items, such as abuse of dominant position, collaboration, and mergers, this dissertation finally imagines and makes some policy suggestions for antitrust legislation and practice.