An essential input price that is “too high” relative to the downstream price leads to inefficient foreclosure and one that is “too low” induces the vertically-integrated firm to engage in non-price discrimination. Displacement ratios are used to derive the range of safe harbor...

We analyze the incentives of a vertically-integrated producer (VIP) to engage in “self-sabotage”.Self-sabotage occurs when a VIP intentionally increases its upstream costs and/or reduces the quality of its upstream product. We identify conditions under which self-sabotage is profitable for...

The Supreme Court decision in Verizon et al v. FCC et al has finally settled the legality of the FCC's methodology for setting prices for wholesale services that are "based on cost", as required by the Telecommunications Act of 1996. The Court's decision reveals unanimous agreement that...