The Evolution of Judicial Standards: Evidence From Litigated Merger Trials

Abstract

A popular narrative suggests that, in the wake of the rise of the Chicago School, the judiciary has grown increasingly lax, making it difficult for antitrust agencies to successfully challenge mergers in court. We develop a theoretical framework to yield hypothesis regarding merger challenges, settlements and outcomes under varying judicial standards. We then undertake an empirical investigation of all mergers, challenges, and litigated outcomes in the U.S. between 1979 and 2021 to test for the presence of shifting judicial standards. Contrary to the popular narrative, we find that judicial standards have become increasingly pro-enforcement during the past four decades.