IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/v44y2001i1p131-59.html
   My bibliography  Save this article

Are Vertical Restraints Pro- or Anticompetitive? Lessons from Interstate Circuit

Author

Listed:
  • Butz, David A
  • Kleit, Andrew N

Abstract

At the heart of antitrust law is the prohibition on horizontal collusion. To enforce this prohibition, the law must accurately define what collusion entails. One of the most controversial areas in antitrust is the issue of vertical restraints. In the last 20 years, economists have come up with any number of pro- and anticompetitive rationales for such restraints. Given this, perhaps one of the most important antitrust cases is Interstate Circuit v. United States, a case that combines issues of horizontal collusion and vertical restraints. A review of the facts shows that collusion cannot be properly inferred from the behavior of the parties involved and that the relevant vertical restraints had efficiency-enhancing properties. We then use Interstate Circuit's behavior to generate a theory of vertical restraints that not only explains the events in the case but also addresses an important controversy in the vertical restraints literature. Copyright 2001 by the University of Chicago.

Suggested Citation

  • Butz, David A & Kleit, Andrew N, 2001. "Are Vertical Restraints Pro- or Anticompetitive? Lessons from Interstate Circuit," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 131-159, April.
  • Handle: RePEc:ucp:jlawec:v:44:y:2001:i:1:p:131-59
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/320277
    Download Restriction: Access to the online full text or PDF requires a subscription.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ippolito, Pauline M, 1991. "Resale Price Maintenance: Empirical Evidence from Litigation," Journal of Law and Economics, University of Chicago Press, vol. 34(2), pages 263-294, October.
    2. Telser, Lester G, 1990. "Why Should Manufacturers Want Fair Trade II?," Journal of Law and Economics, University of Chicago Press, vol. 33(2), pages 409-417, October.
    3. Klein, Benjamin & Murphy, Kevin M, 1988. "Vertical Restraints as Contract Enforcement Mechanisms," Journal of Law and Economics, University of Chicago Press, vol. 31(2), pages 265-297, October.
    4. Ralph Cassady & Jr., 1933. "Some Economic Aspects of Motion Picture Production and Marketing," The Journal of Business, University of Chicago Press, vol. 6, pages 113-113.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Innes, Robert & Hamilton, Stephen F., 2006. "Naked slotting fees for vertical control of multi-product retail markets," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 303-318, March.
    2. H. Møllgaard & Jochen Lorentzen, 2004. "Exclusive Safeguards and Technology Transfer: Subcontracting Agreements in Eastern Europe's Car Component Industry," European Journal of Law and Economics, Springer, vol. 17(1), pages 41-71, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:44:y:2001:i:1:p:131-59. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JLE/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.