Section 2 Symposium: Keith Hylton on The Error Cost Approach and the Case for ‘Substantial Disproportionality’

Keith N. Hylton May 5, 2009

Truth on the Market View Original Source

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The “error cost” or “decision theory” approach to Section 2 legal standards emphasizes the probabilities and costs of errors in monopolization decisions.  Two types of error, and two associated types of cost are examined.  One type of error is that of a false acquittal, or false negative.  The other type of error is that of a false conviction, or false positive.  Under the error cost approach to legal standards, a legal standard should be chosen that minimizes the total expected costs of errors.

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