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Luigi Zingales’ keynote address at the Stigler Center conference: “Is there a focus problem in America?

What is the role of antitrust in a market economy? Historically, economists have been divided on this point. Even Milton Friedman himself admits to having changed his mind, going from being a “great proponent of antitrust laws” to “concluding that antitrust laws do far more harm than good”. Any economic analysis of the costs and benefits of antitrust enforcement must, however, start from empirical evidence of the existence of a concentration problem and its potential effects.

Overall, over the past twenty years, these issues have received relatively little attention, and the presumption that concentration was not a problem has prevailed. This was not the case last year. Based on a report by the Council of Economic Advisers and an article in the Economistconcerns about increased concentration began to surface in public debate.

Yet, we know that all measures of concentration have major shortcomings. Thus, these measures alone cannot be used to infer that there is a concentration problem in America. The more important question is whether this possible increase in concentration has resulted in an increase in firms’ market power and whether this increase in market power has caused a major welfare distortion.

To try to answer these questions, we decided to bring together world experts on these subjects in a conference organized by the Stigler Center. In preparation for this conference, the Stigler Center blog ProMarketat reunited the opinions of many of these world experts. We collect them here for the convenience of conference attendees. We hope that they can serve as a stimulus for a full and lively debate during the conference.