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This paper investigates how the tying of complementary products can be used to preserve and extend monopoly positions …. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly … monopoly position into a newly emerging market. The analysis focuses on the importance of entry costs and network externalities …
Persistent link: https://www.econbiz.de/10012471980
Recent literature notes that when quality is produced with fixed costs, a high quality firm can undercut its rival's prices and may find it profitable to invest more in quality as market size grows large. As a result, a market can remain concentrated even as it grows large. When quality is...
Persistent link: https://www.econbiz.de/10012469023
Previous work has claimed that monopoly power facilitates the provision of credit, since monopolists are better able to … creditworthiness, monopoly power may reduce credit provision because hold up problems ex post will deter borrowers from investing in … establishing creditworthiness. Empirically, we examine the relationship between monopoly power and credit provision, using data on …
Persistent link: https://www.econbiz.de/10012469039
This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers between competitors, and monopolization. In each area, we select the most relevant portions of...
Persistent link: https://www.econbiz.de/10012465789
Estimates are presented of the inverse elasticity of supply of nursing services to the individual hospital, a quantity which is a natural measure of employer market power. The estimates corresponding to employment changes taking place over one year are quite high (in the neighborhood of 0.79)...
Persistent link: https://www.econbiz.de/10012476017
The macroeconomic data of the last thirty years has overturned at least two of Kaldor's famous stylized growth facts: constant interest rates, and a constant labor share. At the same time, the research of Piketty and others has introduced several new and surprising facts: an increase in the...
Persistent link: https://www.econbiz.de/10012453427
Rankings have become increasingly popular on various markets, e.g. the market for study programs. We analyze their welfare implications. Consumers have to choose between two goods of unknown quality with exogenous presence or absence of an unbiased informative ranking. The existence of the...
Persistent link: https://www.econbiz.de/10012457583
Market power reduces equilibrium quantities and distorts production, typically causing welfare losses. However, as Buchanan (1969) noted, market power may mitigate overproduction from negative externalities. This paper examines this in the global oil market, where OPEC's market power affects oil...
Persistent link: https://www.econbiz.de/10015145066
This paper investigates the role of product upgrades and consumer switching costs in the tying of complementary products. Previous analyses of tying have found that a monopolist of one product cannot increase its profits and reduce social welfare by tying and monopolizing a complementary product...
Persistent link: https://www.econbiz.de/10012467274
on monopoly profits. Unless the social planner has access to a direct 100 percent tax on profits, he will always find it …
Persistent link: https://www.econbiz.de/10012468545