Monopolization by "Raising Rivals' Costs": The Standard Oil Case
AbstractStandard monopolized the petroleum industry during the 1870s by cartelizing the stage of production where entry was difficult--petroleum transportation. Standard enforced the transportation cartel by shifting its refinery shipments among railroads to stabilize individual railroad market shares at collusively agreed-on levels. This method of cartel policing was effective because Standard possessed a dominant share of refining, a dominance made possible with the assistance of the railroads. The railroads facilitated Standard's refinery acquisitions and prevented new refiner entry by charging disadvantageously high rates to non-Standard refiners. While Standard used its dominate position in refining to sell refined products at a monopoly price and to purchase crude oil at a monopsony price, Standard did not possess independent market power in refining. Whenever the transportation cartel broke down, Standard's pricing power vanished. Copyright 1996 by the University of Chicago.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Law & Economics.
Volume (Year): 39 (1996)
Issue (Month): 1 (April)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JLE/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Cooper, James C. & Froeb, Luke M. & O'Brien, Dan & Vita, Michael G., 2005. "Vertical antitrust policy as a problem of inference," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 639-664, September.
- Sukkoo Kim, 1998. "The Rise of Multiunit Firms in U.S. Manufacturing," NBER Working Papers 6425, National Bureau of Economic Research, Inc.
- Augusto Rupérez Micola & Albert Banal Estañol & Derek W. Bunn, 2006.
"Incentives and Coordination in Vertically Related Energy Markets,"
CIG Working Papers
SP II 2006-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Micola, Augusto Rupérez & Banal-Estañol, Albert & Bunn, Derek W., 2008. "Incentives and coordination in vertically related energy markets," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 381-393, August.
- Margaret C. Levenstein & Valerie Y. Suslow, 2002. "What Determines Cartel Success?," UMASS Amherst Economics Working Papers 2002-01, University of Massachusetts Amherst, Department of Economics.
- Jean j., GABSZEWICZ & Skerdilajda, ZANAJ, 2006.
"Upstream market foreclosure,"
Discussion Papers (ECON - DÃ©partement des Sciences Economiques)
2006024, Université catholique de Louvain, Département des Sciences Economiques.
- GABSZEWICZ, Jean J. & ZANAJ, Skerdilajda, . "Upstream market foreclosure," CORE Discussion Papers RP -2008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- GABSZEWICZ, Jean J. & ZANAJ, Skerdilajda, 2006. "Upstream market foreclosure," CORE Discussion Papers 2006043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Klumpp, Tilman & Su, Xuejuan, 2013. "Strategic Investments under Open Access: Theory and Evidence," Working Papers 2013-2, University of Alberta, Department of Economics.
- Gilles Grolleau & Lisette Ibanez & Naoufel Mzoughi, 2007. "Industrialists hand in hand with environmentalists: how eco-labeling schemes can help firms to raise rivalsâ€™ costs," European Journal of Law and Economics, Springer, vol. 24(3), pages 215-236, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.