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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14296
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| Title: | The Incentive for Non-Price Discrimination by an Input Monopolist |
| Authors: | Economides, Nicholas |
| Keywords: | monopoly
discrimination
vertical integration |
| Issue Date: | Jan-1998 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-98-09 |
| Abstract: | This paper considers the incentive for non-price discrimination of a
monopolist in an input market who also sells in an oligopoly downstream
market through a subsidiary. Such a monopolist can raise the costs of
the rivals to its subsidiary though discriminatory quality degradation.
I find that the monopolist always, even when it is cost-disadvantaged,
has the incentive to raise the costs of the rivals to its subsidiary in
a discriminatory fashion, but does not have the incentive to raise costs
to the whole downstream industry including its subsidiary. Moreover,
increasing rivalsâ costs nullifies the effects of traditional
imputation floors, and prompts the creation of imputation floors that
account for the artificial costs imposed on downstream rivals. The
results of this paper raise concerns about the potentially
anti-competitive effects of entry of local exchange carriers in long
distance service. The results may also suggest the imposition of certain
unbundling and technical specification disclosure requirements to
monopolists in high technology industries. |
| URI: | http://hdl.handle.net/2451/14296 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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