Multiproduct Monopolist and Full-line Forcing: The Efficiency Argument Revisited
Shaffer (1991) shows that a multiproduct monopolist selling differentiated products through a unique retailer cannot earn monopoly profit using brand specific two-part tariffs and that full-line forcing restores monopoly power. We extend this analysis to more general contracts and shows that full-line forcing is efficient as it increases both industry profits and consumers' surplus.
Volume (Year): 12 (2001)
Issue (Month): 4 ()
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References listed on IDEAS
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- Margaret E. Slade, 1998. "The Leverage Theory of Tying Revisited: Evidence from Newspaper Advertising," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 204-222, October.
- Shaffer, G., 1991. "Capturing Strategic Rent : Full-Line Forcing, Maximum Resale Price Maintenance, Brand Discount and Aggregate Rebates," Papers 91-08, Michigan - Center for Research on Economic & Social Theory.