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Cooperative Antitrust Monopolization and the Theory of Contestable Markets

Published online by Cambridge University Press:  28 April 2015

Terence J. Centner  and
Michael E. Wetzstein
Terence J. Centner
Affiliation:
Department of Agricultural Economics, University of Georgia
Michael E. Wetzstein
Affiliation:
Department of Agricultural Economics, University of Georgia
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Abstract

The judiciary has relied on a firm's market share to evaluate the presence of monopoly power for a Sherman Act monopolization violation. However, an allegation that a firm's market share constitutes monopoly power may be refuted by evidence that there exists a contestable market. Contestable market theory shows that there is no monopoly power where there exists a threat of entry of other firms. This theory thereby offers agricultural cooperatives, which may have a large market share by reasons of the antitrust immunity provided by the Capper-Volstead Act, an argument to overcome allegations of a Sherman Act monopolization violation.

Keywords

cooperativescontestable marketsantitrustmonopoly
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 16 , Issue 1 , July 1984 , pp. 129 - 136
Copyright
Copyright © Southern Agricultural Economics Association 1984

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