Assessing the Anticompetitive Effects of Multiproduct Pricing
35 Pages Posted: 4 Aug 2008 Last revised: 26 Oct 2022
Date Written: July 2008
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.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries
By Dennis W. Carlton and Michael Waldman
-
Innovation, Rent Extraction, and Integration in Systems Markets
By Joseph Farrell and Michael L. Katz
-
Bundling and Competition on the Internet
By Yannis Bakos and Erik Brynjolfsson
-
Vertical Foreclosure with the Choice of Input Specifications
By Jay Pil Choi and Sang-seung Yi
-
Two-Sided Network Effects: A Theory of Information Product Design
-
Tying and Innovation: A Dynamic Analysis of Tying Arrangements
By Jay Pil Choi
-
An Economist's Guide to U.S. V Microsoft
By Richard Gilbert and Michael L. Katz