Law and Economics of Vertical Integration and Control

1st Edition - November 1, 1983
Authors: Roger D. Blair, David L. Kaserman
Language: English
eBook ISBN:
9 7 8 - 1 - 4 8 3 2 - 6 1 0 9 - 6

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.… Read more

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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.

Acknowledgments

1 Introduction

Background

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

Conclusion

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

Introduction

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

Epilogue

Bibliography

Index