Antitrust policy in aftermarkets

Article Abstract:

Economic analysis indicates that there are legitimate reasons for applying antitrust laws to durable goods aftermarkets because producers have the incentive to tie aftermarket goods and services, tying will harm consumers and contractual remedies will not suffice. Tying can occur in aftermarkets when sellers of durable goods require consumers to purchase nonproprietary goods or services along with proprietary supplies for the durable goods. Antitrust analysis can prove important to demonstrate that supercompetitive prices are being charged for the non-proprietary goods and that consumers are being harmed.

Economic aspects, Industrial equipment

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A quality-signaling rationale for aftermarket tying

Article Abstract:

Tying of complementary nondurable goods to the sale of durable goods may yield beneficial results for consumers by signalling to them that the durable goods are high quality. Because of imperfect information, consumers may have little assurance that a durable good is of high quality. Tying agreements are often associated with competitively priced high-quality durables and supracompetitively priced complementary goods. This consumer welfare justification would seem to apply to the facts in Eastman Kodak Co. v. Image Technical Services.

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Demand elasticities in antitrust analysis

Article Abstract:

The economic principles of demand elasticity remained important for the antitrust practitioner to know. Demand elasticity has moved from theoretical practices to becoming important equations for understanding markets and their strengths and to predict the competitive effects of mergers. Another important use for demand elasticity has been in the ranking of substitutes.

Usage, Beliefs, opinions and attitudes, Demand (Economics), Elasticity (Economics)

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