Discriminatory Dealing with Downstream Competitors: Evidence from the Cellular Industry

Posted: 9 Oct 2000

See all articles by David Reiffen

David Reiffen

affiliation not provided to SSRN

Laurence Schumann

Federal Trade Commission

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Abstract

One concern about regulated monopolies entering unregulated vertically-related markets is that they will discriminate against competitors of their unregulated affiliates. However, prohibiting regulated monopolies from offering related goods may preclude production by the most efficient provider. We take advantage of variation across geographic cellular phone markets in the US to examine the effect of integration on output, quality and prices. We find some evidence consistent with efficiencies (greater concentration of lines to users is associated with greater output and higher quality) and some consistent with discrimination (greater interconnection facility ownership concentration is associated with lower output and quality).

Suggested Citation

Reiffen, David and Schumann, Laurence and Ward, Michael Robert, Discriminatory Dealing with Downstream Competitors: Evidence from the Cellular Industry. Available at SSRN: https://ssrn.com/abstract=241997

David Reiffen

affiliation not provided to SSRN

Laurence Schumann

Federal Trade Commission ( email )

600 Pennsylvania Avenue, NW
Washington, VA 20580
United States
202-326-2059 (Phone)

Michael Robert Ward (Contact Author)

University of Texas at Arlington - College of Business Administration - Department of Economics ( email )

330 Business Building
Box 19479
Arlington, TX 76019
United States
817-272-3090 (Phone)
817-272-3145 (Fax)

ZEW, Mannheim ( email )

D-68034 Mannheim
Germany

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