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Multiproduct Monopolist and Full-line Forcing: The Efficiency Argument Revisited

Author

Listed:
  • Thibaud Vergé

    (CMPO and Department of Economics, University of Bristol)

Abstract

Shaffer (1991) shows that a multiproduct monopolist selling differentiated products through a unique retailer cannot earn monopoly profit using brand specific two-part tariffs and that full-line forcing restores monopoly power. We extend this analysis to more general contracts and shows that full-line forcing is efficient as it increases both industry profits and consumers' surplus.

Suggested Citation

  • Thibaud Vergé, 2001. "Multiproduct Monopolist and Full-line Forcing: The Efficiency Argument Revisited," Economics Bulletin, AccessEcon, vol. 12(4), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-01l40002
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    File URL: http://www.accessecon.com/pubs/EB/2001/Volume12/EB-01L40002A.pdf
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    References listed on IDEAS

    as
    1. Shaffer, G., 1991. "Capturing Strategic Rent : Full-Line Forcing, Maximum Resale Price Maintenance, Brand Discount and Aggregate Rebates," Papers 91-08, Michigan - Center for Research on Economic & Social Theory.
    2. Shaffer, Greg, 1991. "Capturing Strategic Rent: Full-Line Forcing, Brand Discounts, Aggregate Rebates, and Maximum Resale Price Maintenance," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 557-575, September.
    3. Whinston, Michael D, 1990. "Tying, Foreclosure, and Exclusion," American Economic Review, American Economic Association, vol. 80(4), pages 837-859, September.
    4. Margaret E. Slade, 1998. "The Leverage Theory of Tying Revisited: Evidence from Newspaper Advertising," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 204-222, October.
    5. Slade, M. E., 1995. "The Leverage Theory of Tying Revisited," G.R.E.Q.A.M. 97b02, Universite Aix-Marseille III.
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    Cited by:

    1. Jeon, Doh-Shin & Menicucci, Domenico, 2009. "Bundling and Competition for Slots: On the Portfolio Effects of Bundling," IDEI Working Papers 574, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jul 2011.
    2. Li, Anqi & Xing, Yiqing, 2020. "Intermediated implementation," European Economic Review, Elsevier, vol. 123(C).

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    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies

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