1. THE MONOPOLIES COMMISSION AND RATE OF RETURN ON CAPITAL: A REPLY.
- Author
-
Rowley, C. K.
- Subjects
MONOPOLIES ,RATE of return ,CAPITAL investments ,ANTITRUST law ,COMPETITIVE advantage in business ,TRADE regulation - Abstract
This article presents the author's reply to the comments on his paper "Monopolies Commission and Rate of Return on Capital." The author says that the main thrust of the criticism is dependent upon a restatement of his own hypothesis which is so distorted as to invalidate the exercise almost in its entirety. The comment rightly centered attention upon the most significant section of the paper, namely that entitled "Does the Choice of Guidepost Make a Difference?," in which the author sets about testing the hypothesis at issue in this discussion. The paper was concerned with the use of rate of return on capital as a regulatory mechanism by the British Monopolies Commission in its investigation of positions of single-firm market power as defined by the British antitrust laws. The hypothesis attributed to the author in the criticism bears no relationship whatsoever to the null hypothesis set out in the paper. The commentator favors a more detailed cost-benefit analysis in antitrust investigations than that currently used by the Monopolies Commission. In this analysis, rate of return on capital criteria would play an important role. No doubt the results of the author's investigation, casting doubt on the general unambiguity of the criteria, were somewhat unpalatable. He has argued elsewhere, however, against the cost-benefit approach to antitrust on more general grounds. more...
- Published
- 1971
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