Hindsight Bias in Antitrust Law

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The task of estimating the ex ante probability of something happening when one knows what has actually happened inherently carries a risk of hindsight bias. Antitrust law often requires judges to place themselves in the position of one of the litigating parties at an earlier time and to make predictions, as of that point in time, about future outcomes. For example, in attempted monopolization jurisprudence, the fact finder must determine whether, at the time a defendant’s anti competitive conduct occurred, it was likely to create monopoly power. In many cases, however, judges assert that if the defendant did not actually succeed in monopolizing the market, then there was never any likelihood that it ever could have succeeded. The Article explains why this is classic hindsight bias. The Article details and analyzes dozens of examples of hindsight bias improperly affecting antitrust decisions across three areas of antitrust law: attempted monopolization, predatory pricing, and price-fixing conspiracies. The Article explains how hindsight bias effectively amends substantive antitrust doctrine in a manner that undermines the ability of antitrust law to protect consumers and efficient competitors from antitrust injury. Finally, the Article concludes that courts can reduce the risk of hindsight bias distorting the results in antitrust litigation by using evidentiary rules to limit the information that the jury sees.