The Riddle Underlying Refusal-to-Deal Theory
4 Pages Posted: 8 Mar 2010 Last revised: 21 May 2014
Date Written: March 8, 2010
May a dominant firm refuse to share its intellectual property with its rivals? This question lies at the heart of a highly divisive, international debate concerning the proper application of the antitrust laws. In this short essay, we consider a profound, yet previously unaddressed, incongruity underlying the controversy. Specifically, why is it that monopolists refuse to share their IP, even at monopoly prices? In exploring this question, we unearth an inescapable contradiction that afflicts the arguments of those who would require monopolists to license their IP in certain circumstances.
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