Download this Paper Open PDF in Browser

Assessing the Anticompetitive Effects of Multiproduct Pricing

35 Pages Posted: 4 Aug 2008  

Dennis W. Carlton

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Patrick Greenlee

U.S. Department of Justice - Antitrust Division

Michael Waldman

Cornell University - Samuel Curtis Johnson Graduate School of Management

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

Carlton , Dennis W. and Greenlee, Patrick and Waldman, Michael, Assessing the Anticompetitive Effects of Multiproduct Pricing (July 2008). NBER Working Paper No. w14199. Available at SSRN: https://ssrn.com/abstract=1179869

Dennis W. Carlton (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Patrick Greenlee

U.S. Department of Justice - Antitrust Division ( email )

600 E Street NW
Suite 10,000
Washington, DC 20530
United States

Michael Waldman

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-8631 (Phone)

Paper statistics

Downloads
50
Abstract Views
804