Models of Market Behaviour and Competition Law: Exclusive Dealing

The paper arose out of the authors\u27 belief that economic principles should, and probably will, play a larger role in the decisions of the new Competition Tribunal. The objective of the paper is to clarify some of the underlying assumptions and choices implicit in the regulation of competitive behaviour by examining the literature on economic analysis of market behaviour written by both economists and lawyers. The authors are especially concerned with the recent emphasis on strategic behaviour and its contrast to the Chicago school approach which recommends less interference with market behaviour. They examine the differences between the assumptions of both models and then consider the implications for the regulation of exclusive dealing. In particular, the authors examine the requirement that competition must be substantially lessened, by developing two different approaches to a rule-of-reason test