IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v10y2010i1n36.html
   My bibliography  Save this article

Accidents, Liability Obligations and Monopolized Markets for Spare Parts

Author

Listed:
  • Baake Pio

    (DIW Berlin)

Abstract

We analyze the effects of accidents and liability obligations on the incentives of car manufacturers to monopolize the markets for their spare parts. We show that monopolized markets for spare parts lead to inefficiently high prices for spare parts. Furthermore, monopolization induces the manufacturers to choose inefficiently high qualities. The key for these results is the observation that high prices for spare parts entail a negative external effect inasmuch as liability obligations imply that consumers of competing products have to pay the high prices as well.

Suggested Citation

  • Baake Pio, 2010. "Accidents, Liability Obligations and Monopolized Markets for Spare Parts," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-26, May.
    • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:36
    DOI: 10.2202/1935-1682.2080
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1935-1682.2080
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1935-1682.2080?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Severin Borenstein & Jeffrey K. Mackie‐Mason & Janet S. Netz, 2000. "Exercising Market Power in Proprietary Aftermarkets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 157-188, June.
    2. Chen, Zhiqi & Ross, Thomas W, 1993. "Refusals to Deal, Price Discrimination, and Independent Service Organizations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(4), pages 593-614, Winter.
    3. Emch Eric R., 2003. "Price Discrimination via Proprietary Aftermarkets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-32, April.
    4. Zhiqi Chen & Thomas Ross & W. Stanbury, 1998. "Refusals to Deal and Aftermarkets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(1), pages 131-151, April.
    5. repec:bla:jemstr:v:2:y:1993:i:4:p:593-614:a is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laussel, Didier & Resende, Joana, 2014. "Dynamic price competition in aftermarkets with network effects," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 106-118.
    2. Miao, Chun-Hui, 2022. "The pricing of ancillary goods when selling on a platform," International Journal of Industrial Organization, Elsevier, vol. 83(C).
    3. Pekka Sääskilahti, 2016. "Buying Decision Coordination and Monopoly Pricing of Network Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(2), pages 313-333, April.
    4. Miao, Chun-Hui, 2010. "Consumer myopia, standardization and aftermarket monopolization," European Economic Review, Elsevier, vol. 54(7), pages 931-946, October.
    5. Ahmadi, Iman & Skiera, Bernd & Lambrecht, Anja & Heubrandner, Florian, 2017. "Time preferences and the pricing of complementary durables and consumables," International Journal of Research in Marketing, Elsevier, vol. 34(4), pages 813-828.
    6. Heubrandner, Florian & Skiera, Bernd, 2010. "Time preference and the welfare effects of tie-in sales," Economics Letters, Elsevier, vol. 108(3), pages 314-317, September.
    7. Dennis W. Carlton & Michael Waldman, 2014. "Robert Bork's Contributions to Antitrust Perspectives on Tying Behavior," Journal of Law and Economics, University of Chicago Press, vol. 57(S3), pages 121-144.
    8. Keeler, James B., 2022. "On the Right to Repair Agricultural Equipment," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322398, Agricultural and Applied Economics Association.
    9. Luis Cabral, 2008. "Aftermarket Power and Basic Market Competition," Working Papers 08-20, New York University, Leonard N. Stern School of Business, Department of Economics.
    10. Lee, Jinhyuk & Park, Jaeok, 2014. "Pricing Of Complementary Goods As An Implicit Financial Arrangement," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(2), pages 207-228, December.
    11. Michael Waldman, 2010. "Competition, Monopoly, and Aftermarkets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 26(1), pages 54-91, April.
    12. Hodaka Morita & Michael Waldman, 2010. "Competition, Monopoly Maintenance, and Consumer Switching Costs," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 230-255, February.
    13. Michael Waldman, 2003. "Durable Goods Theory for Real World Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 131-154, Winter.
    14. Cabral, Luís, 2014. "Aftermarket power and foremarket competition," International Journal of Industrial Organization, Elsevier, vol. 35(C), pages 60-69.
    15. Laussel, Didier & Van Long, Ngo & Resende, Joana, 2015. "Network effects, aftermarkets and the Coase conjecture: A dynamic Markovian approach," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 84-96.
    16. Dainis Zēgners & Tobias Kretschmer, 2017. "Competition with Aftermarket Power When Consumers Are Heterogeneous," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 96-122, February.
    17. Yuk‐fai Fong & Jin Li & Ke Liu, 2016. "When Does Aftermarket Monopolization Soften Foremarket Competition?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(4), pages 852-879, December.
    18. Lam, W., 2015. "Switching Costs in Two-sided Markets," LIDAM Discussion Papers CORE 2015024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    19. Jota Ishikawa & Hodaka Morita & Hiroshi Mukunoki, 2016. "Trade liberalization and aftermarket services for imports," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(4), pages 719-764, October.
    20. Glenn Ellison, 2005. "A Model of Add-On Pricing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 585-637.

    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:bpj:bejeap:v:10:y:2010:i:1:n:36. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.