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The Durapolist Puzzle: Monopoly Power in Durable-Goods Market

52 Pages Posted: 18 Jun 2007 Last revised: 31 Mar 2008

Barak Orbach

University of Arizona

Abstract

This Article studies the durapolist, the durable-goods monopolist. Durapolists have long argued that, unlike perishable-goods monopolists, they face difficulties in exercising market power despite their monopolistic position. During the past thirty years, economists have extensively studied the individual arguments durapolists deploy regarding their inability to exert market power. While economists have confirmed some of these arguments, a general framework for analyzing durapolists as a distinct group of monopolists has not emerged. This Article offers such a framework. It first presents the problems of durapolists in exercising market power and explains how courts have treated these problems. It then analyzes the strategies durapolists have devised to overcome difficulties in acquiring and maintaining monopoly power and the legal implications of these strategies. This Article's major contributions are (a) expanding the conceptual scope of the durapolist problem, (b) presenting the durapolist problem as an explanation for many common business practices employed by durapolists, and (c) analyzing the legal implications of strategies employed to overcome the durapolist problem.

Keywords: Antitrust, Durable Goods, Monopoly, Pricing, Time Inconsistency, Tying

JEL Classification: D11, D91, K21, L11, L12, L41, L68

Suggested Citation

Orbach, Barak, The Durapolist Puzzle: Monopoly Power in Durable-Goods Market. Yale Journal on Regulation, Vol. 21, pp. 67-118, 2004. Available at SSRN: https://ssrn.com/abstract=496175

Barak Orbach (Contact Author)

University of Arizona ( email )

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Tuscon, AZ 85721-0176
United States
520-626-7256 (Phone)
520.858.0025 (Fax)

HOME PAGE: http://www.orbach.org

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