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Assessing the Anticompetitive Effects of Multiproduct PricingDennis W. CarltonUniversity of Chicago - Booth School of Business; National Bureau of Economic Research (NBER) Patrick GreenleeU.S. Department of Justice - Antitrust Division Michael WaldmanCornell University - Samuel Curtis Johnson Graduate School of Management July 2008 NBER Working Paper No. w14199 Abstract: In response to the "standardless" approach used in LePage's v. 3M, the Antitrust Modernization Commission (AMC) and others advocate using a discount allocation approach to assess whether bundled loyalty discounts violate Section 2 of the Sherman Act. This approach treats loyalty discounts like predatory pricing. The analogy to predatory pricing is flawed. We propose an alternative approach that focuses on the presence of significant scale economies. We use our approach to analyze LePage's, as well as the recent PeaceHealth decision.
Number of Pages in PDF File: 35 working papers seriesDate posted: August 4, 2008Suggested CitationContact Information
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