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![handle is hein.journals/antibull34 and id is 923 raw text is: The Antitrust Bulletin/Winter 1989
Understanding 'raising rivals'
costs' : reply
BY TIMOTHY J. BRENNAN*
In an earlier article,' I argued that the newly popular raising
rivals' costs concept2 [RRC] adds little if anything to antitrust
analysis that conventional horizontal, market-oriented analysis
provides, and that its use may lead to wrong decisions. If costs
depend upon input prices, rivals' costs cannot be raised without
market power over inputs. Such market power, and not whether
it is owned by a downstream firm, should be the focus of
* Associate Professor, Policy Sciences and Economics, University
of Maryland, Baltimore County.
AUTHOR'S NOTE: Marius Schwartz and Luke Froeb provided helpful
comments and discussion; they bear no responsibility for remaining
errors.
1 Brennan, Understanding Raising Rivals' Costs, 33 ANTITRUST
BULL. 95 (1988).
2 The most thorough presentation of this concept is in Kratten-
maker & Salop, Anticompetitive Exclusion: Raising Rivals' Costs to
Achieve Power Over Price, 96 YALE L.J. 209 (1986).
@ 1990 by Fcdra Legal Publications, Inc.
909](ViewImageLocal?handle=hein.journals/antibull34&div=45&collection=&method=preview&ext=.png&size=3)