search query: @freeterm Vertigal integration / total: 1
reference: 1 / 1
« previous | next »
| Author: | Economides, N. |
| Title: | The incentive for non-price discrimination by an input monopolist |
| Journal: | International Journal of Industrial Organization
1998 : MAY, VOL. 16:3, p. 271-284 |
| Index terms: | Monopoly Discrimination Markets |
| Freeterms: | Vertigal integration |
| Language: | eng |
| Abstract: | The paper considers the incentive for non-price discrimination of a monopolist in an input market who also sells in an oligopoly downstream market through a subsidiary. Such a monopolist can raise the costs of the rivals to its subsidiary though discriminatory quality degradation. It is found in this paper that the monopolist always, even when it is cost-disadvantaged, has the incentive to raise the costs of the rivals to its subsidiary in a discriminatory fashion, but does not have the incentive to raise costs to the whole downstream industry including its subsidiary. Moreover, increasing rivals' costs nullifies the effects of traditional imputation floors, and prompts the creation of imputation floors that account for the artificial costs imposed on downstream rivals. The results of this paper raise concerns about the potentially anti-competitive effects of entry of local exchange carriers in long distance service. In addition, the results may suggest the imposition of certain unbundling and technical specification disclosure requirements to monopolists in high technology industries. |
« previous | next »
SCIMA