Law and Economics of Vertical Integration and Control

Law and Economics of Vertical Integration and Control

1st Edition - November 1, 1983

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  • Authors: Roger D. Blair, David L. Kaserman
  • eBook ISBN: 9781483261096

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Law and Economics of Vertical Integration and Control focuses on the processes, methodologies, and approaches involved in the law and economics of vertical integration and control. The publication first elaborates on transaction costs, fixed proportions and contractual alternatives, and variable proportions and contractual alternatives. Discussions focus on sales revenue royalties, ownership integration, output royalties, important product-specific services, successive monopoly, advantages and limitations of internal transfers, and transaction cost determinants. The text then examines vertical integration under uncertainty and vertical integration without contractual alternatives. The book ponders on legal treatment of ownership integration and per se illegal contractual controls. Topics include tying arrangements, public policy assessment, resale price maintenance, vertical integration and the Sherman Act, market foreclosure doctrine, and the 1982 Merger Guidelines. The text also takes a look at contractual controls that are not illegal per se, alternative legal rules, and antitrust policy. The publication is a dependable reference for researchers interested in the law and economics of vertical integration and control.

Table of Contents

  • Acknowledgments

    1 Introduction


    Purpose of Present Study

    Standard for Analysis

    Part I Economics of Vertical Control

    2 Transaction Costs

    The Incentive to Integrate

    The Welfare Effects

    Transaction Cost Determinants

    Advantages and Limitations of Internal Transfers

    Contractual Alternatives

    3 Fixed Proportions and Contractual Alternatives

    No Incentive for Vertical Control

    Successive Monopoly

    Important Product-Specific Services

    Entry Barriers

    4 Variable Proportions and Contractual Alternatives

    Ownership Integration

    Tying Arrangements

    Output Royalties

    Sales Revenue Royalties

    Lump-Sum Entry Fees

    Vertical Controls: Problems in Practice


    5 Vertical Integration Under Uncertainty

    Early Studies

    More Recent Studies

    Random Demand

    Random Input Prices

    6 Vertical Integration without Contractual Alternatives

    Regulation and Vertical Integration

    Monopsony and Vertical Integration

    Price Discrimination and Vertical Integration

    Vertical Integration and Downstream Disequilibrium

    Appendix: A Formal Analysis of Vertical Integration and Downstream Disequilibrium

    Part II Legal Analysis of Vertical Control

    7 Legal Treatment of Ownership Integration

    Vertical Integration and the Sherman Act

    Vertical Integration and the Clayton Act

    Department of Justice Merger Guidelines, 1968

    Market Foreclosure Doctrine

    The 1982 Merger Guidelines

    Concluding Remarks

    8 Per Se Illegal Contractual Controls

    Fixing Maximum-Resale Prices

    Resale Price Maintenance

    Tying Arrangements

    Public Policy Assessment

    9 Contractual Controls That Are Not Illegal Per Se


    Presumptively Legal Controls

    Exclusive Dealing and Requirements Contracts

    Territorial Restraints

    Concluding Remarks

    Part III Public Policy Analysis

    10 Conclusion

    Alternative Legal Rules

    Appropriate Antitrust Policy

    Areas for Future Research




Product details

  • No. of pages: 224
  • Language: English
  • Copyright: © Academic Press 1983
  • Published: November 1, 1983
  • Imprint: Academic Press
  • eBook ISBN: 9781483261096

About the Authors

Roger D. Blair

David L. Kaserman

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