Author(s)
Dennis Carlton, David S. Evans, Robert W. Hahn and Michael Waldman
Source
AEI Press (AEI-Brookings Joint Center for Regulatory Studies), November 2005
Summary
This book looks at deals that effect firms at different levels of the supply chain, like producers and distributors.
Policy Relevance
Old-style antitrust rules that assume tying hurts consumers are no longer supported by many economists, who find it often helps consumers.
Main Points
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Agreements to observe certain limits between economic actors at different levels of the supply chain are called “vertical restraints.”
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“Tying” is one example. Tying happens when a firm requires customers to purchase product B when they buy product A.
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The authors who contributed to this book agree that tying, a common business practice, can often benefit for consumers. But it is hard for businesses to explain.
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The authors agree that old antitrust rule that tying should be assumed to be illegal (“per se illegal”) is harmful.
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Courts should look closely at each case (a “rule of reason” approach) instead.
