search query: @author Chen, Z. / total: 17
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| Author: | Chen, Z. Ross, T. W. |
| Title: | Refusals to deal and orders to supply in competitive markets |
| Journal: | International Journal of Industrial Organization
1999 : APR, VOL. 17:3, p. 399-417 |
| Index terms: | Markets Competition |
| Freeterms: | Aftermarkets Tying Warranties Refusals to deal |
| Language: | eng |
| Abstract: | A number of recent antitrust cases in North America and Europe have involved allegations that manufacturers of durable products have refused to supply parts to independent service organizations, apparently to monopolize the market for repairs of their products. In this paper, such refusals are analyzed in competitive market and connected aftermarket. In the model, the refusals help to support higher prices for high intensity-high value users. However, these higher charges permit the recovery of higher costs incurred during an initial warranty period. Since full prices equal full marginal costs in equilibrium, the refusals permit the attainment of a first-best outcome and an attempt by antitrust authorities to force supply will be welfare-reducing. |
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