Errors in competition policy

When I meet someone who works for competition authorities I often try to get them to answer two questions: (1) which standard of harm they follow as a principle: consumer welfare or total welfare, and (2) when it comes to making inevitable errors, which one would they be less willing to succumb to: type 1 or type 2?

The answer to the first question is typically predictable, and is often published in most authorities mission statement, i.e. consumer welfare. Yet the second question often triggers observable discomfort in my colleges, which has always puzzled me. A type 1 error of intervention is when the authority mistakenly intervenes in a pro-competitive case. A type 2 error means the mistaken non-intervention in a case where intervention should have happened. Type 2 errors mean a direct threat to consumer welfare, type 1 errors mean a direct threat to producer welfare. If the maximising consumer welfare is admittedly a general goal then should we just assume that more attention is always going to be directed to avoiding type 2 rather than type 1 errors? Probably yes, but then why shy away from declaring this?


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