A Model of Vertical Restriction and Equilibrium in Retailing

The Journal of Business © 1983 The University of Chicago PressThis model of distribution provides a rationale for restrictions placed on retailers by manufacturers. The manufacturer's customers are located uniformly along a road, and retailing operations are subject to increasing returns. Three difficulties arise. First, retailers acting in concert can earn positive profits at the expense of the manufacturer and consumers. Second, costless relocation, free entry, and competition will not result in the store density and retail price favored by the manufacturer. Third, store locations fixed in the short run imply that price cutting would undermine the density of stores preferred by the manufacturer

Antitrust and Business Activity: The First Quarter Century

Business History Review 70 (Autumn 1996): 363-401. © 1996 by The President and Fellows of Harvard College.The modern corporation arose out of the trusts, mergers and holding companies of the late 19th century, an evolution that generated volatile political reactions. Though economists and business historians have analyzed the rise of the corporate form, they have neglected a second, related problem: Did attacks on the modern corporation depress business activity, as critics of Theodore Roosevelt and Howard Taft claimed? This paper has three aims. First, it covers the relevant analytical issues, including the effects of policy uncertainty on business investment. Second, it reviews the history of shifting governmental policy in the light of its possible economic effects. Finally, it examines die statistical link between antitrust enforcement and business activity for the years 1891–1914. Antitrust case filings against large firms coincided with business downturns, while filings against small firms did not. These findings provide supporting evidence though not decisive proof for the charge that trust-busting hurt business activity

Decreasing Average Cost and Competition: A New Look at the Addyston Pipe Case

Journal of Law and Economics © 1982 The University of Chicag

The Stock Market and Early Antitrust Enforcement

Journal of Law and Economics © 1993 The University of Chicag

The Political Economy of Cable - "Open Access."

Advocates of "open access" claim that Internet Service Providers (ISPs) should be able to use a cable TV system's bandwidth on the same terms offered to ISPs owned by the cable system. On that view, "open access" mitigates a monopoly bottleneck and encourages the growth of broadband. This paper shows that cable operators do enjoy market power, and do seek to leverage a dominant position in video into the broadband access market by allocating too little bandwidth for Internet access. Yet, rather than protect cable operators from cannibalizing their cable TV revenue, this strategy defends against imposition of common carrier regulation, which would allow system capacity to be appropriated by regulators and rival broadband networks. Ironically, the push for "open access" limits Internet access by encouraging this under-allocation of broadband spectrum, and by introducing coordination problems slowing technology deployment. These effects are empirically evident in the competitive superiority of cable's "closed" platform vis-a-vis "open" DSL networks, and in financial market reactions to key regulatory events and mergers in broadband.