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date: 19 September 2019

(p. 619) Index

(p. 619) Index

A&W, 389
Abrantes-Metz, Rosa M.
on corporate governance and compliance, 586, 600, 604, 606–607, 609–610
on screening, 528, 535–540, 542–544
Abreu, Dilip, 478–479, 490
Abuse-of-dominance, 234–251
behavioral definition, 238
in China, 236, 241–242, 244–245
competition and, 237–239
corruption and, 238
in Costa Rica, 240
divestiture, 250
Efficient Component Pricing Rule (ECPR) and, 250
in El Salvador, 240
enforcement, 237–239
essential facilities doctrine and, 250
in EU, 236
examples of, 239–242
in Hungary, 237
in India, 236–237, 245–248
in Jamaica, 237, 240–241
in Latvia, 238, 241
legal standard, 235–236
in Lithuania, 237
in Mexico, 237
overview, 234–235, 250–251
in Peru, 241
in Poland, 237
remedies in, 249–250
in Romania, 237
in Russia, 236, 241–244
sanctions, 249–250
in Senegal, 241–242
in Slovak Republic, 237
in South Africa, 237–238, 241, 248–249
structural definition, 238
in Ukraine, 238
in United States, 236
in Uzbekistan, 237
Addanki, S., 537, 542
Added value, 260–261
Adelman, M.A., 43
Adobe, 556, 565
Advanced Micro Devices (AMD), 92, 95, 114
AEC (As-efficient-competitor) test, 168–169
Agency costs, corporate governance and compliance and, 587
Aghion, Philippe, 148, 171, 176, 204, 317–318, 369
Aguzzoni, Luca, 596
Alcoa, 58
Alexander, Barbara, 449
Allied, 562
Allocative distortion, 79–80
Amemiya, Kei, 205
American Bar Association, Antitrust Law Section, 598
American Medical Association, 559
American National Standards Institute (ANSI), 557, 561, 567, 569
American Recovery and Reinvestment Act of 2009, 453
American Society of Mechanical Engineers (ASME), 564–565
American Sugar Refining Company, 368
American Tobacco Company, 44, 58
Amsterdam second-price auction, 518n8
Angelucci, Charles, 588
Anticompetitive nature of exclusionary conduct, 7–19
diminished ability to compete and, 26–29
enhanced market power and, 30
harm to consumers and, 30
negative contracting externalities and, 31–32
Antitrust Division. See Justice Department
Antitrust Modernization Commission
intellectual property rights and, 148
predatory buying and, 93
predatory pricing and, 41, 50, 52
quality commitment discounts and, 110, 116
Aoyagi, M., 508–509
Apesteguia, Jose, 436–437
Apple, 129, 260, 565–566, 572
Areeda, Phillip
on exclusive dealing, 320
on predatory pricing, 46–47, 49, 54
on quantity commitment discounts, 94
on squeeze claims, 125
on tying, 338, 347
Areeda-Turner rule, 47–49, 52–54
Arlen, Jennifer, 591
“Arrive by reasoning,” 482–486
Arrow, Kenneth, 148, 171, 560
Arrow's Information Paradox, 135
As-efficient-competitor (AEC) test, 168–169
Asker, John, 368, 394, 502
ASME (American Society of Mechanical Engineers), 564–565
Assessment errors, dominant firms and, 169–170
AstraZeneca, 167
Asymmetry, collusion and, 418n6
Athey, Susan, 422–423, 508–509, 513–514, 530, 533
Attribution test
flaws with, 111–116
liability thresholds and, 110
overview, 105–109
uses of, 111–116
Aubert, Cecile, 429–430
Auctions
Amsterdam second-price auction, 518n8
bid rigging in, 501–503. See also Bid rigging
collusion in, 501–503
common value auction, 499–500
defined, 498
Dutch auction, 499–500
English auction, 499–500
first-price sealed-bid (FPSB) auction, 499–500, 503–505, 510, 516, 518
Japanese auction, 499
one-shot auctions, bid rigging in, 504–507
overview, 498–499
private value auction, 499–500
repeated auctions, bid rigging in, 507–510
second-price sealed-bid (SPSB) auction, 499–500, 504–505
standard models, 499–500
Audretsch, David B., 444
Aumann, Robert J., 481–482, 488–490, 492
Australia
cartels in, 445
corporate governance and compliance in, 598
vertical restraints in, 384
Avraham, Raphael, 120
Azoulay, Pierre, 395–397
Bagwell, Kyle, 422–423, 478, 508–509, 530, 533
Baidu, 245
Bain, Joe S., 478
Bajari, Patrick, 514, 546, 548, 600
Baker, Jonathan B., 431, 494
Baker, Wayne E., 598
Baldwin, L., 511–512
Bank of Japan, 536
Bar-Isaac, Heski, 368
Barkoff, Rupert M., 403, 408
Baskin-Robbins, 329–330, 343, 400
Baumol, William J., 47–48, 55
Bayesian hypothesis testing, screening and, 525–528
Bayesian Nash equilibrium, 488
Beckenstein, Alan R., 598
Beijing Netcom, 219–220
Beijing Qihoo Technology, 216, 228–230
Belgium, franchising in, 395, 407
Below-cost pricing in Japan, 202–203
(p. 621) Beltone, 309
Benford's Law, 602, 606–607, 610
Benoit, Jean-Pierre, 479
Ben-Porath, Elchanan, 491
Bergen, Mark, 304, 394
Bergin, James, 492–493
Bernheim, B. Douglas, 3, 311–312, 365, 419, 434, 483
Bertrand markets
bid rigging in, 498, 508
collusion in, 416, 435
screening in, 530, 541
Besanko, David, 254, 266, 431–432
Bessen, James, 138
Betamax, 558
Biddle, Brad, 555
Bid rigging, 498–519
in auctions, 501–503
in Bertrand markets, 498, 508
in China, 501
in Cournot markets, 498
deterrence of, 517–518
empirical evidence, 510–515
in EU, 501
experimental evidence, 515–517
incentive for collusion, 503–504
Nash equilibrium and, 500, 504
in one-shot auctions, 504–507
overview, 498–503, 518–519
in repeated auctions, 507–510
screening for, 602–604
theory of, 503–510
in United States, 501–502
Bigoni, Marta, 436–437
Blair, Roger D., 343, 400, 405
Blanckenberg, K., 547, 549
Block, Michael K., 431, 453
Blue Cross and Blue Shield Association, 314
Blundering into tacit collusion, 492–493
Blu-ray, 558
Bohannan, Christina, 132, 148, 334, 343, 345–346
Böhm, Franz, 161–163, 182
Bolotova, Y., 536, 543
Bolton, Patrick, 52, 204, 317–318, 369
Bork, Robert H., 9, 311–312, 318, 337
Bosch, Jean-Claude, 595–596
Bounties as incentives to induce detection, 599–600
Bowen, Robert M., 599
Bowman, Ward S., 333
Bradburd, Ralph, 449
Brandeis, Louis, 333–334
Brandenburger, Adam, 481–482, 492
Brannon, I., 540
Brazil
cartels in, 453–454
screening in, 524, 606
Breakup of cartels, causes of, 455–458
Brenkers, Randy, 398
Bresnahan, T., 540–541, 545
Breyer, Stephen, 58, 382
British Banking Association, 536
British Standards Institution, 557
Broadway-Hale, 123–125, 127
Brock, William A., 479
Brodley, Joseph F., 52
Bryant, Peter G., 444, 448
Bundling
as exclusionary conduct, 18, 22–24
explicit bundling, 104–105
implicit bundling, 104–105
intellectual property rights, 343–344
quality commitment discounts and, 102, 104–105
Burger King, 354, 389
“Burning the dollar” game, 491
Burns, Malcolm R., 44
Bush, George H.W., 194
Business-format franchising, 390
Business strategy, 253–272
added value, 260–261
competitive advantage, 261–266. See also Competitive advantage
complementarities in, 258
consumer surplus and, 255, 258–260
economic framework, 253–254
enhancing value creation, 256–258
“Five Forces,” 255, 258–260, 263
overview, 253–255, 271–272
producer surplus and, 255, 258–260
rivalry and, 258–260
(p. 622) scope of firm, 266–271
sustainability of competitive advantage, 264–266
synergies, 267–268
trade-offs in, 257–258
value creation and capture framework, 255–261
“But for” prices, 180–182
Buyback options, 352
California Air Resources Board, 575
Call, Andrew C., 599
Canada
Competition Bureau Canada, 470, 538
franchising in, 388–389
screening in, 606
vertical restraints in, 353, 372, 384
Can System, 203
Caremark, 101
Carlsson, Hans, 488–489
Carlton, Dennis W., 370, 469–471
Carrefour, 329
Cartels
in Australia, 445
in Brazil, 453–454
breakup, causes of, 455–458
competition, effect on formation of, 447
competition and, 162
concerted squeezing and, 128–129
corporate governance and compliance, effect of firm indicia of cartel activity on, 589–594
detection, 430–433
effects on prices, 453–455
empirical evidence of collusion, 442–459
enforcement and, 424–433
in EU, 443–446
experimental evidence of collusion, 433–435
in Finland, 443
formation of, 446–449
in Germany, 444–445, 455
hub-and-spoke cartels, 128–129
in Japan, 191, 445
leniency programs and, 424–430, 435–437
in Mexico, 454n33
Nash equilibrium and, 426–428
in Netherlands, 596
prevalence of, 443–446
price setting by, 449–452
recession, effect on formation of, 447–449
screening, 430–433
in Sweden, 443–444
in United Kingdom, 443–444
in United States, 443–446
CDS (Credit default swaps), 536–537
Census Bureau, 390
Certification services, 280–281
Chang, Myong-Hun, 457
Charness, Gary, 489
Che, Y.-K., 517–518
Chen, Chia-Wen, 394, 446
Chen, J., 531–532
Chevron, 575
Chicago School
decision theory and, 165
dynamic efficiencies and, 171
intellectual property rights and, 140
on tying, 337–338
on vertical restraints, 352
Chicken Delight, 409
China
abuse-of-dominance in, 236, 241–242, 244–245
Anti-Monopoly Commission, 211–212, 215
Anti-Monopoly Law of 2007 (AML), 188, 210–221, 225–231
Anti-Unfair Competition Law, 213, 218
bid rigging in, 501
buying at unfairly low price in, 217–218
China Telcom, 219–220
China Unicom, 219–220
definition of market dominance in, 214
discriminatory practices in, 218–219
dominant market position in, 214–215
Draft Guidelines for Anti-Monopoly Enforcement in the Field of Intellectual Property Rights, 225–226
EU enforcement structure compared, 217–218, 225, 227, 244
(p. 623) exclusive dealing in, 222–224
Guidelines Concerning the Definition of Relevant Markets, 215–216, 228
Intellectual Property Division, 212
intellectual property rights in, 225–226
Japan compared, 230–232
joint dominance in, 215
Judicial Interpretation on the Application of Laws to Anti-Monopoly Private Actions, 213
legal provisions of AML, 211–212
liability in, 213
Ministry of Commerce, 212, 227
monopoly in, 210–232
National Development and Reform Commission (NDRC), 211–213, 215, 217–219, 221–227, 230–231, 244–245
non-price-related abuse of dominance in, 221–230
overview, 188, 210–211, 227–230
predatory pricing in, 218
presumption of market dominance in, 215
price discrimination in, 220–221
Price Law, 213–214, 218, 220–221, 231
price-related abuse of dominance in, 217–221
private actions in, 212–213
Qihoo v. Tencent, 228–230
refusals to deal in, 221–222
Regulation on Anti-Price Monopoly, 212, 217–218, 221–224, 227, 230
Regulation on Prohibiting the Abuse of a Market Dominant Position, 212, 214, 217–218, 221–222, 224, 227, 230
Regulation on the Prevention of Below Cost Dumping Conduct, 218
relevant laws, 213–214
relevant market in, 215–216
rule-of-reason analysis in, 216–217
selling at unfairly high price in, 217–218
State Administration for Industry and Commerce (SAIC), 211–212, 214–215, 217–218, 221–222, 224–225, 227, 230–231, 244–245
state-owned enterprises (SOEs), 226–227
Supreme People's Court, 212–213, 215
tying in, 224–225
US enforcement structure compared, 225
China Internet Network Information
Center, 229
China Netcom, 219
China Telecom, 215, 219, 227
China Unicom, 215, 219, 227
Choi, Jay Pil, 415, 420, 430–431, 587
Christie, William G., 523–525, 540, 545, 606
Church & Dwight, 326
Cisco, 565
Clark, John M., 41
Clayton Act of 1914
exclusive dealing and, 305–306
Japanese antitrust law compared, 189
predatory pricing under, 45
quality commitment discounts and, 90n4
tying under, 331, 347
vertical restraints under, 372, 379
Coase, Ronald H., 267
Coca-Cola, 35, 95, 283, 388–389
Cohen, Mark A., 453
Collusion
asymmetry and, 418n6
in auctions, 501–503
in Bertrand markets, 416, 435
bid rigging, 498–519. See also Bid rigging
in cartels. See Cartels
concentration and, 418
corporate governance and compliance and, 586–611. See also Corporate governance and compliance
in Cournot markets, 421, 433–434
demand conditions and, 418–419
empirical evidence, 442–459
experimental evidence, 433–435
factors facilitating, 417–424
folk theorem and, 417n5
game theory and, 416–417
imperfect observability and monitoring and, 420–422
incomplete information and communication and, 422–423
multimarket contact and, 419–420
in NASDAQ, 523–525, 540
number of firms and, 418
screening for, 523–551. See also Screening
self-enforcing nature of, 416
(p. 624) standard setting and, 554–581. See also Standard setting
strong explicit collusion, 468–477
symmetry and, 418
tacit collusion, 464–494. See also Tacit collusion
theory of, 416–417
vertical mergers and, 423–424
vertical restraints and, 423–424
weak explicit collusion, 468–477
Comanor, William B., 288
Commerce Clearing House Trade Regulation Reporter, 444
Commerce Department, franchising and, 389–390
Commodities Futures Trading Commission, screening and, 606–607
Common value auction, 499–500
Communication in tacit collusion, 466–468
Compatibility standards, 555
Competition
cartels, effect on formation of, 447
cartels and, 162
in developing countries, 237–239
diminished ability to compete, exclusionary conduct and, 26–29
economic power versus, 162–163
monopsony compared, 74
standard setting and, 554–581. See also Standard setting
Competitive advantage, 261–266
accumulated market experience and, 266
benefit-based advantage, 262–263
cost-based advantage, 262
defined, 261
niche-based advantage, 263
resource protection and, 264–265
sustainability of, 264–266
Competitive discounts. See Quantity commitment discounts
Complementarities in business strategy, 258
Complements, tying of, 339–341
Compte, Olivier, 418
Concentration, collusion and, 418
Concerted squeezing
cartels and, 128–129
overview, 128–129
railroad industry and, 128
unilateral squeezing compared, 122–125
Connor, Robert A., 443, 454, 536, 543, 596
Consignment selling arrangements, 352
Consumer Goods Pricing Act of 1975, 373
Consumers, exclusionary conduct and harm to, 30
Consumer surplus, 255, 258–260
Contract adaptation, franchising and, 405–408
Contracts that reference rivals (CRRs), 89–90
Convergent-elimination view, 483–486
Conwood, 325–326
Cooper, James, 355, 371, 527
Corporate governance and compliance, 586–611
agency costs and, 587
in Australia, 598
bid rigging, screening for, 602–604
bounties as incentives to induce detection, 599–600
cartel activity, firm indicia of, 589–594
compliance, use of screens in, 608–609
compliance culture, 596–597
culture, 594–597
empirical evidence, 597–599
employees and, 593–594
enforcement and, 591–592
in EU, 596
in Germany, 588
incentive pay, 590–591
internal monitoring, screens in, 607–608
in Japan, 588
LIBOR, screening for, 609–610
market share, screening for, 605
mathematical laws, screens based on, 606
middle management and, 593–594
norm creation, 594–595
organizational environment, 587–589
overview, 586, 610–611
price fixing, screening for, 604–605
screens, use of, 600–610
senior management and, 592–593
in South Korea, 600
(p. 625) stock-based cartel event studies, 595–596
success of screens, 606–607
in Switzerland, 598
in United Kingdom, 597–598, 600
in United States, 597–598
Corruption, abuse-of-dominance and, 238
Costa Rica, abuse-of-dominance in, 240
Cotropia, Christopher A., 138
Cotter, Thomas F., 132
Counterstrategies, RRC theory and, 64
Cournot, Augustin, 355
Cournot markets
bid rigging in, 498
collusion in, 421, 433–434
screening in, 530
Credit default swaps (CDS), 536–537
Cross-licenses of patents, 571–572
CRRs (Contracts that reference rivals), 89–90
Dach, Christian, 279
Dairy Queen, 343
Dal Bo, Pedro, 433
Damages
in Japan, 196–199
liquidated damages, 317n40
tying, 347–348
Dandong Yichuang Yaoye Co., Ltd., 223
David, Paul A., 554
Davidow, Joel, 444
Dealer property rights, exclusive dealing and, 324–326
Decision theory, 164–171
assessment errors and, 169–170
Chicago School and, 165
in EU, 165–166
information deficiencies and, 168–169
overview, 164–165, 170–171
self-enforcement and, 166–170
special responsibility of dominant firms and, 166–167
TFEU and, 166–171
Defense Department, cartels and, 453
Defense Personnel Support Center, 535, 604
Degussa, 449
Dekel, Eddie, 491
Dell, 92, 575
Demand conditions, collusion and, 418–419
Demand curves, quality commitment discounts and, 95–97
Demand effects, RRC theory and, 64
DeNA Co., Ltd, 209
Deneckere, Raymond, 364
Dentsply, 321–324
Denture industry, exclusive dealing in, 321–324
Detection, cartels and, 430–433
Deterrence of bid rigging, 517–518
Detre, Joshua D., 596
Deutsches Institut für Normung, 557
Deutsche Telekom, 167, 240
Developing countries, monopoly in, 234–251. See also Abuse-of-dominance
Dick, Andrew R., 445
Dicke, Thomas S., 388
Digicel, 240
Diminished ability to compete, exclusionary conduct and, 26–29
Direct interaction, tacit collusion and, 467n7
Discount Pricing Consumer Protection Act (proposed), 373n27
Discounts. See Quantity commitment discounts; specific discount
Discriminatory practices
in China, 218–219
in Japan, 207–209
Disparagement of alternative proposals, standard setting and, 564–565
Divestiture in abuse-of-dominance cases, 250
DLF, 247
Dnes, Antony W., 389
Doane, Michael J., 523, 587
Dominant firms, 153–184
as-efficient-competitor (AEC) test, 168–169
assessment errors and, 169–170
attempted monopolization, 156
“but for” prices, 180–182
competition on merits, 158, 174–176
decision theory and, 164–171. See also Decision theory
dynamic efficiencies and, 171–178
in EU, 153–184
excessive pricing and, 178–182. See also Excessive pricing
(p. 626) exclusionary conduct and, 154–155
exploitative abuses, 155–156
information deficiencies and, 168–169
innovation and, 171–178
interaction between, 176–177
interpretation differences between Sherman Act and TFEU, 156–160
monopolization versus abuse, 154–155
ordoliberalism and, 160–164. See also Ordoliberalism
overview, 153–154, 182–184
protection of competitive process, 158–159, 172–174
self-enforcement by, 166–170
special responsibility of, 157, 166–167
in United States, 153–184
wording differences between Sherman Act and TFEU, 154–156
Domino's Pizza, 343, 402–403
Donggang Hongda Pharmaceutical Co., Ltd., 223
Dorfman, Robert, 360
Dorfman-Steiner theorem, 360–361
Double marginalization, tying and, 339–341
Dufwenberg, Martin, 436–437
du Pont, 58
Dutch auction, 499–500
Dutta, Shantanu, 304, 394
DVDs, 558
Dyck, Alexander, 599
Dynamic efficiencies
Chicago School and, 171
dominant firms and, 171–178
Easterbrook, Frank H., 53, 67, 156–157, 159, 165, 527
Eaton, 92
Eckard, E. Woodrow, Jr., 444, 448, 595–596
Economies of joint provision, 341–344
intellectual property bundling, 343–344
overview, 341
package licensing, 343–344
production cost efficiencies, 342
quality control efficiencies, 342–343
Economies of scale, quality commitment discounts and, 103n33
ECPR (Efficient Component Pricing Rule), abuse-of-dominance and, 250
Edlin, Aaron S., 47, 51
Edwards, Corwin D., 419
Efficiencies
production cost efficiencies, 342
quality control efficiencies, 342–343
RRC theory and, 64
vertical restraints and, 359–364
Efficient Component Pricing Rule (ECPR), abuse-of-dominance and, 250
Elhauge, Einer, 52
Eli Lilly & Co., 92
El Salvador, abuse-of-dominance in, 240
Elzinga, Kenneth G., 40, 43
Employees, corporate governance and compliance and, 593–594
Empresa de Servicios Publicos de
Heredia, 240
Enforcement regimes
cartels and, 424–433
in developing countries, 237–239
in Japan, 195–199
predatory pricing and, 45–49
England. See United Kingdom
English auction, 499–500
Enhanced market power, exclusionary conduct and, 30
Entrant-tax-by-contract theory of exclusive dealing, 316–318
Eruthku, C., 538, 547
Essential facilities, 121, 250
ETSI (European Telecommunications Standards Institute), 557, 568
Eucken, Walter, 161–163, 178, 182
Euribor, 607
European Central Bank, 536
European Commission
abuse and, 155
Block Exemption Regulation on Vertical Restraints, 405–406
cartels and, 445, 448–449, 454, 456, 591
competition on merits and, 175
decision theory and, 167–169
Directorate-General for Competition, 157, 591
excessive pricing and, 179–181
(p. 627) exclusionary conduct and, 24n45
Guidance Paper, 157, 159
Guidelines on Vertical Restraints, 297–301, 358, 367, 375–378, 380–383, 405–406
nonhorizontal merger guidelines, 69–70
RRC theory and, 69–70
screening and, 606
tacit collusion and, 494
Technology Transfer and Research and Development Block Exemption Regulations, 147n37
European Community Treaty, intellectual property rights under, 147
European Court of First Instance
intellectual property rights and, 141
vertical restraints and, 378
European Court of Justice and General Court
decision theory and, 168–169
excessive pricing and, 179
predatory pricing and, 46
protection of competitive process and, 158–159, 173–174
European Telecommunications Standards Institute (ETSI), 557, 568
European Union. See also Treaty on the Functioning of the European Union
abuse-of-dominance standard in, 236
bid rigging in, 501
cartels in, 443–446
Chinese enforcement structure compared, 217–218, 225, 227, 244
corporate governance and compliance in, 596
decision theory in, 165–166
dominant firms in, 153–184. See also Dominant firms
essential facilities doctrine in, 250
exclusive dealing in, 306–307
franchising in, 387, 405–408
intellectual property rights in, 142, 146–147
Japanese enforcement structure compared, 201
mergers in, 269n9
predatory pricing in, 46, 51
resale price maintenance in, 297–301
vertical restraints in, 352–353, 366, 371–384
Evans, David S., 342
Evans, Phil, 449
Ex ante bargaining, patents and, 579–580
Excel (software), 206
Excessive pricing, 178–182
“but for” prices, 180–182
ordoliberalism and, 178–179
overview, 178
practical objections against enforcement, 179–180
Exclusionary conduct, 3–36
anticompetitive nature of, 7–19, 26–32
bundling, 18, 22–24
defined, 3
determination of, 20–26
diminished ability to compete and, 26–29
duration of, 29n52
enhanced market power and, 30
evaluation of, 19–32
examples of procompetitive nature, 34–35
exclusionary conditions, 15–19
harm to consumers and, 30
“hold-up problem,” 7n10
in Japan, 200–209
loyalty discounts, 5n5, 18n37, 32n57
mechanism of, 8–14
modes of conduct implicating mechanism, 15
negative contracting externalities and, 7–13, 31–32
100% exclusive deals, 15
overview, 3–6, 35–36
patents and, 4n3
practices involving exclusionary conditions, 15–17
practices not involving exclusionary conditions, 17–19
predatory pricing, 17–18, 21
procompetitive nature of, 32–35
quality commitment discounts and, 102
rule-of-reason analysis, 4–6
“signal jamming problem,” 27n48
single-product pricing, 18, 24
in soft drink industry, 35
standard setting as venue for, 559
tying, 5n6, 19, 25
volume discounts, 18n37, 24–25
Exclusive dealing, 304–326
(p. 628) assessment of harm, 320–324
in China, 222–224
dealer property rights and, 324–326
in denture industry, 321–324
entrant-tax-by-contract theory of, 316–318
in EU, 306–307
ex post exclusive dealing, 318–320
externalities, role of, 311–313
franchising and, 393–395
in health insurance, 314–315
in hearing aid industry, 307–309
in Japan, 203–205
linear versus nonlinear contracts, 311n29
naked exclusion theory of, 313–316
in optical industry, 310–311
overview, 304–307, 326
partial exclusive dealing, 304
as property right creation, 307–311
quantity commitment discounts and, 100
theories of, 311–320
vertical restraints and, 379–381
Exclusive distribution. See Franchising
Exclusive territories
franchising and, 393, 395–398
vertical restraints and, 374–376
Exclusivity restraints, 352, 365–367, 369–370
Explicit bundling, 104–105
Export Trading Company Act of 1982, 445
Ex post exclusive dealing, 318–320
Express agreements, tacit collusion and, 467n6
Externalities
exclusive dealing, role in, 311–313
negative contracting externalities, exclusionary conduct and, 7–13, 31–32
Facebook, 176
Farrell, Joseph, 266, 554
Faulkner, Robert R., 598
Federal Acquisitions Regulations, 519
Federal Reserve Bank, 536
Federal Trade Commission (FTC)
bid rigging and, 501
exclusionary conduct and, 16n30
exclusive dealing and, 306, 309–311
Japanese enforcement structure compared, 195
Merger Guidelines. See Merger Guidelines
quality commitment discounts and, 92
RRC theory and, 67
screening and, 524, 606
standard setting and, 559, 570, 574–575, 578, 580
tacit collusion and, 477
tying and, 331
vertical restraints and, 353
Federal Trade Commission Act of 1914, 189, 306, 331, 559, 574–575
Feinberg, Robert M., 431, 433
Ferrari, Stijn, 407
Fidelity discounts as exclusionary conduct, 5n5, 18n37, 32n57
Finland, cartels in, 443
First-price sealed-bid (FPSB) auction, 499–500, 503–505, 510, 516, 518
Fisher, Franklin M., 48
“Five Forces,” 255, 258–260, 263
Focal points, tacit collusion and, 477–478, 483–486
Folk theorem
collusion and, 417n5
tacit collusion and, 469, 479–480
Fölster, Stefan, 443
Fonseca, Miguel A., 434
Foreclosure
quality commitment discounts and, 102
tying and, 337–338
Forest Service, 511–513
Fox, Eleanor M., 159
FPSB (First-price sealed-bid) auction. See First-price sealed-bid (FPSB) auction
Franchising, 387–410
in Belgium, 395, 407
in Canada, 388–389
contract adaptation and, 405–408
in EU, 387, 405–408
exclusive dealing and, 393–395
exclusive territories and, 393, 395–398
in Germany, 388
historical background, 388–392
mandatory purchase requirements in, 401
overview, 387–388, 408–409
resale price maintenance and, 393, 403–405
role of antitrust law, 393–408
traditional versus business-format franchising, 390
tying and, 393, 399–403
in United States, 387–392
Frandata Corporation, 395–396
Freedom of Information Act of 1966, 519
Free-riding, 278–281
in brand image retail services, 280–281
certification services and, 280–281
in retail services, 278–279
“showrooming,” 279
Freiburg School. See Ordoliberalism
French Association for Standardization, 557
Friedman, James W., 478
Froeb, Luke M., 453, 523, 535, 542
Fudenberg, Drew, 492
Fuji Iron and Steel Company, 193
Fuller, John, 598
Gabel, H. Landis, 598
Gal, Michal S., 159
Gallo, Joseph C., 444
Game theory
“burning the dollar” game, 491
collusion and, 416–417
tacit collusion and, 478–479
Garces-Tolon, E., 494
Gasoline industry, tacit collusion in, 473–474
Gates, Bill, 338
Geis, Gilbert, 598
Geist, A., 547, 549
Geithman, Frederick E., 395
General Agreement on Tariffs and Trade (GATT), 193
General Electric, 368, 444
Genesove, David, 452, 539, 542, 599
Geradin, Damien, 180
Gerlach, Heiko, 415, 420, 423, 430–431, 587
Germany
antitrust law in, 163
cartels in, 444–445, 455
Competition Authority, 608
corporate governance and compliance in, 588
franchising in, 388
screening in, 608
vertical restraints in, 384
Gertner, Robert H., 469–471
Gilbert, Richard, 554
Gillette, 268
Glaxo, 101
Goeree, Jacob K., 500
Gonzalez, Tanja Artiga ???, 589, 607
Google, 176, 260, 272
Gould, J. R., 287
Gould, Jay, 128
Graham, D., 502, 504–506
Granitz, Elizabeth, 67
Grantback provisions, intellectual property rights and, 140–141
Great Atlantic and Pacific Tea Company (A&P), 43, 58, 268
Great Britain. See United Kingdom
GREE, 209
Green, Edward J.
on collusion, 421
on corporate governance and compliance, 587
on screening, 530, 532
on tacit collusion, 464, 471, 476–477, 479, 490
Greenstein, Shane, 554
Grimes, Warren, 403
Günster, Andrea, 596
Haltiwanger, John, 419
Han, Martijn A., 588
Hanazono, Makoto, 423
Hand, Learned, 126
Harm to consumers, 30
Harper, Martha Matilda, 389
Harper Beauty Shops, 389
Harrington, Joseph E., Jr.
on cartels, 419, 422, 427–429, 432–433, 446, 452, 457
on corporate governance and compliance, 600
on screening, 531–532
on tacit collusion, 477
Harris, H. Stephan, 195
Harris, J. H., 523, 525
(p. 630) Harsanyi, John C., 487–488
Hart-Scott-Rodino Act of 1976, 268
Hatch-Waxman Act of 1984, 68, 143, 149
Health insurance, exclusive dealing in, 314–315
Health maintenance organizations (HMOs), 95
Hearing aid industry, exclusive dealing in, 307–309
Heeb, Randall, 3, 365
Heide, Jan B., 304, 394
Heimler, Alberto, 234, 250
Hemphill, C. Scott, 56
Hendricks, Ken, 498, 506, 541, 587
Herling, John, 598
Hewlett-Packard, 92, 556
Heyer, Ken, 370
Higgins, Richard S., 62
High-technology markets, tying in, 345–346
Hildebrand, V., 538, 547
Hillman, Arye L., 564
Hinloopen, Jeroen, 436
HMOs (Health maintenance organizations), 95
“Hold-up problem,” 7n10
Hopenhayn, H., 507–509
Hörner, J., 480
Housekeeper (software), 229–230
Hovenkamp, Erik, 329
Hovenkamp, Herbert
on exclusive dealing, 320
on innovation, 132, 148
on predatory pricing, 50, 53
on quantity commitment discounts, 94
on tying, 329, 334, 338, 343, 345–347
on vertical restraints, 380
Howard Johnson, 389
Hu, A., 518
Hub-and-spoke cartels, 128–129
Hubei Salt Industry Group, 224–225
Huck, Steffen, 434
Hungary, abuse-of-dominance in, 237
Hüschelrath, Kai, 600, 608
Husted, Thomas A., 433
Iacobucci, Edward M., 351
Ichitaro (software), 206
Idiosyncratic per se rule, tying and, 330–331
IEC (International Electrochemical Commission), 556
IFA (International Franchise Association), 395–396
Image Technical Service, 401
IMF (International Monetary Fund), 193
Imhof, Lorens A., 492
Imperfect observability and monitoring, collusion and, 420–422
Implicit bundling, 104–105
Incentive pay, 590–591
Incomplete information and communication, collusion and, 422–423
India
abuse-of-dominance in, 236–237, 245–248
Competition Act of 2002, 245, 247
Competition Commission, 246–247
MCX Stock Exchange, 247
National Stock Exchange, 247
Indian Head, 562
Industry standard setting. See Standard setting
Inference, screening as problem of, 525–530
Bayesian hypothesis testing and, 525–528
testing versus screening, 528–530
Information deficiencies, dominant firms and, 168–169
Initial capital investment as communication of tacit collusion, 490–491
Injunctions, patents and, 572–574
Innovation, 132–149
aggressiveness of antitrust law and, 145–148
dominant firms and, 171–178
intellectual property rights and, 134–141
leniency toward joint conduct, role of antitrust law in, 144–145
overview, 132–134, 148–149
patents and, 134–141
penalizing noncompetitive practices, role of antitrust law in, 143–144
role of antitrust law in promoting, 141–148
Intel Corporation, 92, 95, 101, 176–177, 204–205, 260
Intellectual property rights
bundling, 343–344
empirical evidence, 138–139
in EU, 142, 146–147
exclusive rights in, 135–136
grantback provisions and, 140–141
innovation and, 134–139
patents. See Patents
prospect theory and, 137–138
relationship with antitrust law, 139–141
social benefits versus social costs, 136–137
standard setting and, 567–580
venture capitalists and, 138
Internal monitoring, screening in, 607–608
International Competition Network (ICN), 234, 237–240, 449
International Electrochemical Commission (IEC), 556
International Franchise Association (IFA), 395–396
International Monetary Fund (IMF), 193
International Organization for Standardization (ISO), 555–557
International Telecommunications Union (ITU), 556–557
International Trade Commission (ITC), 68, 573, 581
Internet
distribution restrictions, 367
online retailing, resale price maintenance (RPM) of, 277–301. See also Resale price maintenance (RPM)
Internet Explorer, 175, 259, 561, 565
Interoperability standards, 555
Isaac, R. Mark, 466, 515–517
ISO (International Organization for Standardization), 555–557
Italy, screening in, 606
ITC (International Trade Commission), 68, 573, 581
ITU (International Telecommunications Union), 556–557
Ivaldi, Marc, 469, 494
Ivoclar, 322–324
Jamaica, abuse-of-dominance in, 237, 240–241
Jamison, Julian, 480
Japan
Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, 192
Action of Prohibition of Privation Monopolization and Maintenance of Fair Trade (AMA), 188–197, 199, 201–203, 209–210, 230–231
below-cost pricing in, 202–203
cartels in, 191, 445
China compared, 230–232
civil procedure in, 199
competition policy versus industrial policy in, 193
control in, 201
corporate governance and compliance in, 588
discriminatory treatment in, 207–209
enforcement structure in, 195–199
entrepreneurs in, 200
EU enforcement structure compared, 201
exclusionary conduct in, 200–209
exclusive dealing in, 203–205
Fair Trade Commission, 189–190, 193–210, 231
future trends, 209–210
Guidelines for Exclusionary Private Monopolization under the Antimonopoly Act, 200–204, 206–207, 231–232
historical background of AMA, 190–194
Intel, 204–205
Intellectual Property Guidelines, 209
JASRAC, 205
Law of the Elimination of Excessive Concentration of Economic Power (LECP), 191, 193
Microsoft, 206
Ministry of Internal Affairs and Communications, 208
Ministry of International Trade and Industry, 191
monopoly in, 188–210
1977 Amendment to AMA, 193–194
original AMA, 190–193
overview, 188–190, 209–210
particular field of trade in, 201–202
(p. 632) private monopolization in, 199–202
procedures in monopoly cases, 196
refusal to supply in, 207–209
sanctions in, 196–199
screening in, 606
Shinpan hearings, 196
SSNIP test, 201–202
Structural Impediments Initiative, 194
substantial restraint of competition in, 202
Supreme Commander of Allied Forces and, 191
Supreme Court, 196, 202, 208
surcharges in, 196–199
Toshiba Elevator, 206–207
tying in, 205–207
US enforcement structure compared, 189, 201
Japanese auction, 499
Japanese Industrial Standards Committee, 557
Japanese Society for Rights of Authors, Composers and Publishers (JASRAC), 205
JEDEC (Joint Electron Device Engineering Council), 575
Jenny, Frédéric, 418
Jiménez, J. L., 539, 545
John Hancock, 314
Johnson & Johnson, 95, 100–101, 105, 113
Joint Economic Committee, 540
Joint Electron Device Engineering Council (JEDEC), 575–576
Joint venture, standard setting as, 559–561
Joskow, Paul L., 48, 50, 56
Juang, Wei-Torng, 492
Judge, George, 606, 609–610
Jullien, Bruno, 423–424
Justice Department (DOJ)
bid rigging and, 514, 604
cartels and, 444–445, 448, 454, 456–457, 459, 589, 591
CRRs and, 89–90
exclusive dealing and, 314–315
intellectual property rights and, 139–140
Japanese enforcement structure compared, 195
Merger Guidelines. See Merger Guidelines
monopolization and, 155
price fixing and, 605
quality commitment discounts and, 93–94, 110, 112–114, 116–117
RRC theory and, 67
screening and, 523, 534, 606–607
standard setting and, 565, 579–580
tacit collusion and, 477
vertical restraints and, 353
Just Systems, 206
Kandori, Michihiro, 492
Kaplow, Louis, 425
Karpoff, Jonathan M., 596
Kaserman, David L., 596
Katz, Michael L., 554
Kell West Regional Hospital, 112–113
Kim, J., 517–518
Kime, Posey T., 190
Kitch, Edmund, 137
Klein, Benjamin
on exclusive dealing, 304, 325
on franchising, 389
on quantity commitment discounts, 99
on reputation effects, 595
on resale price maintenance, 277
on RRC theory, 67
on tying, 343
on vertical restraints, 363
Klein-Murphy theorem, 368
Klemperer, Paul, 266
Klevorick, Alvin K., 48, 50, 56
Klor's, 123–125
Kodak, 58, 377, 401–402, 408
Koller, Roland H., 43
Koukou Guard (software), 229
Kovacic, William, 429–430, 465, 526, 528
Koyak, Robert A., 453, 535, 542
Kraakman, Reiner, 591
Krattenmaker, Thomas G., 65, 127
Kreps, David, 44
Krishna, Vijay, 479
Krishnan, Ranjani, 364
Kroc, Ray, 396
Kwasnica, A., 516–517
Lafontaine, Francine, 343, 371, 387, 400, 405
Laitenberger, Ulrich, 600
(p. 633) Lambson, Val E., 479
Lande, Robert H., 454, 596
Landeo, Claudia M., 315–316
Langus, Gregor, 596
Lanham Act of 1946, 399
Larouche, Pierre, 153
Latvia, abuse-of-dominance in, 238, 241
Lawrence, Paul R., 599
Lee, D. Scott, 596
Leegin Creative Products, Inc., 403–404
Leffler, K., 595
Lemley, Mark A., 138, 555
Leniency programs
cartels and, 424–430, 435–437
experimental evidence, 435–437
Lenovo, 101
LePage's, 91, 105
Lerner Index, monopsony and, 73
Levenstein, Margaret C., 442, 443–445, 447–448, 451–452, 454–457, 587
Leverage theory, tying and, 333–334
Levin, J., 513–514
LIBOR, screening and, 536–538, 606–607, 609–610
Liebowitz, Stan J., 345
Liefmann, Robert, 444
Lin, Ping, 188
Lipman, Barton L., 492–493
Li Qing, 219
Liquidated damages, 317n40
Lithuania, abuse-of-dominance in, 237
Localized price cutting, 43n7
Lock-in doctrine, 332
Long, Clarisa, 138
“Long purse” theory, 42, 45
Lopatka, John E., 72
Lopomo, G., 505–506
Lotus 1-2-3 (software), 206
Loyalty contracts, 351
Loyalty discounts
economics of, 100–102
as exclusionary conduct, 5n5, 18n37, 32n57
LTE, 558, 569
Magrane-Houston, 379
Mailath, George J., 492, 505–506
Malik, Arun, 425
Mandatory purchase requirements in franchising, 401
MAP (Minimum advertised price) policies, 291–292
Margolis, Stephen E., 345
Market power
enhanced market power, exclusionary conduct and, 30
tying and, 332–333
Market share, screening for, 605
Market share discounts
CRRs and, 90n2
as exclusionary conduct, 5n5, 18n37, 32n57
Markey, Edward, 524
Marshall, Robert C.
on bid rigging, 501–506, 511–512, 517
on corporate governance and compliance, 587
on screening, 531, 533, 548
on tacit collusion, 464, 472–473
Martin, Gerald S., 596
Marvel, Howard P., 287, 304, 308, 364, 365, 399
Marx, Leslie M.
on bid rigging, 501–503, 505–506, 517
on corporate governance and compliance, 587
on screening, 531, 533, 548
on tacit collusion, 464, 472–473
Mason, Charles F., 434–435
Masten, Scott E., 317
Master Kang, 217–218
Mathematical laws, screening based on, 606
Matsushima, Hitoshi, 420
Matutes, Carmen, 555
Mayer Laboratories, 326
Mazzeo, Michael J., 253
McAfee, R. Preston, 498, 505, 507–508, 587
McCafferty, Stephen, 287
McCormick Harvesting Company, 388
McDevitt, Ryan C., 253
McDonald's, 343, 354, 389, 396, 405
McGee, John S., 40–45, 48, 51, 56
McGuire Act of 1952, 373
McMillan, J., 505, 507–508
Medco, 101
Medicaid, 314
Medicare, 314
(p. 634) Mehta, Kirtikumar, 234, 250
Merger Guidelines
Japanese enforcement structure compared, 201
tacit collusion and, 477
Mergers. See also Vertical mergers
in EU, 269n9
Mestmäcker, Ernst-Joachim, 156–157, 163
“Metering,” 334–335
Metz, Albert, 537, 543, 609–610
Meurer, Michael J., 138
Mexico
abuse-of-dominance in, 237
cartels in, 454n33
Competition Commission, 454n33
screening in, 524, 606
Michael, Steven C., 400
Microsoft
competition on merits and, 175
competitive advantage and, 272
as dominant firm, 176–177
exclusive dealing and, 319n44
intellectual property rights and, 141
in Japan, 206
RRC theory and, 64
standard setting and, 565–566
tying and, 338
unilateral squeezing and, 126
value creation and capture framework and, 259
vertical restraints and, 372, 378, 384
Microsoft Office (software), 556
Microsoft Word (software), 206
Middle management, corporate governance and compliance and, 593–594
Miksch, Leonhard, 178–179
Milgrom, Paul, 53, 499–500
Miller, D., 536, 543
Miller, Nathan H., 457
Miller-Tydings Act of 1937, 373
Mills, David E., 40
Minimum advertised price (MAP) policies, 291–292
Misuse, tying and, 345–346
Miwa, Yoshiro, 195
Monopoly
business strategy and, 253–272. See also Business strategy
in China, 210–232. See also China
in developing countries, 234–251. See also Abuse-of-dominance
dominant firms, 153–184. See also Dominant firms
exclusionary conduct and, 3–36. See also Exclusionary conduct
innovation and, 132–149. See also Innovation
in Japan, 188–210. See also Japan
predatory buying, 72–87. See also Predatory buying
predatory pricing, 40–58. See also Predatory pricing
quantity commitment discounts, 89–117. See also Quantity commitment discounts
squeeze claims, 120–129. See also Squeeze claims
Monopsony
competition compared, 74
dominant buyer and, 75–76
economics of, 73–77
input markets and, 74–76
Lerner Index and, 73
output markets and, 76–77
predatory buying and, 72–73. See also Predatory buying
Morse, Adair, 599
Morton Salt, 345–346
Mossel Jamaica Limited, 240
Motchenkova, Evgenia, 595
Motion Picture Patents Company, 399
Motorola, 572
Motta, Massimo, 428–430, 596
Mueller, Willard F., 395
Mullin, Wallace P., 452, 539, 542, 599
Multimarket contact, collusion and, 419–420
Muris, Timothy J., 68
Murphy, Kevin M., 89, 99, 304, 325
Myerson, R., 500
Naked exclusion theory of exclusive dealing, 313–316
NASDAQ, screening and, 523–525, 540, (p. 635) 606–607
Nash equilibrium
Bayesian Nash equilibrium, 488
bid rigging and, 500, 504
cartels and, 426–428
tacit collusion and, 469–470, 480–482, 490–493
vertical restraints and, 370
National Electrical Code, 562
National Fire Prevention Association, 562
National Industrial Recovery Act of 1933, 446
National Macaroni Manufacturer's Association, 559
National Semiconductor, 574
NavTeq, 69
Negative contracting externalities, exclusionary conduct and, 7–13, 31–32
Negotiated Data Solutions, 574
Netherlands
cartels in, 596
screening in, 606
Netscape (browser), 338, 566
Neven, D., 494
New York Transportation Department, 510–511, 541
Nigrini, Mark, 606
Nihon Network Vision, 203
Nike, 299
“Nine No-Nos,” 139–140
Nippon Soda, 449
Nippon Steel, 193
Nippon Telegraph, 208
Nocke, Volker, 423
Nokia, 69
Nold, Frederick C., 431, 453
Nonlinear pricing schedules, 351
Normann, Hans-Theo, 434
Norm creation, 594–595
Nowell, Clifford, 435
Number of firms, collusion and, 418
Nurski, Laura, 395, 407
O'Brien, Daniel P., 355, 371
Observable posted prices, tacit collusion and, 473–474
OECD Global Forum on Competition Policy, 240–241
Oechssler, Jorg, 434
Offerman, Theo, 500, 518
Ohashi, Hiroshi, 188, 195
Oligopoly, tacit collusion in, 464–494. See also Tacit collusion
Oligopoly and the Theory of Games (Friedman), 478
Omnibus Trade Act of 1988, 194
Onderstal, S., 518
One-shot auctions, bid rigging in, 504–507
Online retailing, resale price maintenance (RPM) of, 277–301. See also Resale price maintenance (RPM)
Optical industry, exclusive dealing in, 310–311
Orbach, Barak, 120
Ordoliberalism, 160–164
competition versus economic power, 162–163
excessive pricing and, 178–179
as general legal and economic theory, 160–161
overview, 160, 164, 183–184
in TFEU, 163–164
threat from economic power and, 161–162
Ordover, Janusz A., 42, 44, 50, 65, 235
Organization for Economic Cooperation and Development (OECD) Global Forum on Competition Policy, 240–241
Over, Mead, Jr., 449
Overpurchasing model, RRC theory compared, 64
Package licensing, 343–344
Pareto efficiency, vertical restraints and, 358
Parker, Christine, 598
Partial exclusive dealing, 304
Partial exclusivity discounts as exclusionary conduct, 5n5, 18n37, 32n57
Patent Act of 1952, 139n15, 143, 330–331, 345
Patent and Trademark Office, RRC theory and, 67
Patents
cross-licenses of, 571–572
empirical evidence, 138–139
ex ante bargaining and, 579–580
exclusionary conduct and, 4n3
exclusive rights in, 135–136
(p. 636) failure to disclose standard-essential patents, 574–577
injunctions and, 572–574
innovation and, 134–141
overly broad declarations of standard-essential patents, 577–579
package licensing of standard-essential patents, 577–579
prospect theory and, 137–138
reasonable and non-discriminatory licensing commitments, 569–574
royalties, 570–571
sale and assignment of, 574
social benefits versus social costs, 136–137
standard setting and patent holdup, 568–569
venture capitalists and, 138
Pathmark, 268
Pearce, David G., 479, 482, 490
Peck, James, 364
Peltzman, Sam, 443
PepsiCo, 35, 95, 270, 283
Perdiguero, J., 539
Pereira, P., 540
Peru, abuse-of-dominance in, 241
Pesendorfer, M., 514–515, 517
Petroleum Marketing Practices Act of 1978, 398
Philips, 578
Phillips, Owen R., 434–435
Phlips, Louis, 49
Pinto, Brijesh P., 523
Pioneer Foods, 248
Pitofsky, Robert, 280, 287
Pittman, Russell, 235
Plastic bags, tacit collusion and, 474–477
Plott, Charles R., 466, 515–516
Poland, abuse-of-dominance in, 237
Polo, Michele, 428–430
Porter, Michael, 255–260, 263
Porter, Robert H.
on bid rigging, 506, 510–511, 513
on cartels, 421
on screening, 530, 532, 541, 545–546
on tacit collusion, 471, 476–477, 479, 490
Posner, Richard A., 444, 493
Predatory buying, 72–87
allocative distortion, 80
caselaw, 77–78
completely different rivals and monopoly power, 82–84
completely different rivals and no monopoly power, 78–82
dominant seller and, 83
economics of, 73–77
monopsony and, 72–73
no allocative distortion, 79
overview, 72–73, 87
same competitors in input and output markets, 84–86
Predatory pricing, 40–58
Areeda-Turner rule, 47–49, 52–54
Brooke Group, 49–53
in China, 218
economics of, 41–45
enforcement and, 45–49
in EU, 46, 51
as exclusionary conduct, 17–18, 21
intent, 46–47
localized price cutting, 43n7
“long purse” theory, 42, 45
overview, 40–41, 57–58
price-cost comparisons in, 49–50, 54–56
recoupment in, 50–51, 56–57
Preston, L. E., 287
Price ceilings, 352
Price-cost comparisons in predatory pricing, 54–56
Price discrimination
in China, 220–221
tying and, 334–337
Price fixing
screening for, 604–605
standard setting as venue for, 559
Price floors, 352
Price leadership, tacit collusion and, 472n17, 477–478
Price setting by cartels, 449–452
Price squeezes, 121
Pricing, predatory. See Predatory pricing
Princo, 578–579
Private value auction, 499–500
Procompetitive nature of exclusionary conduct
overview, 32–34
Procter & Gamble, 268
Producer surplus, 255, 258–260
Production cost efficiencies, 342
Property right creation, exclusive dealing as, 307–311
Prospect theory, patents and, 137–138
PSKS, Inc., 403–404
Purchase share discounts as exclusionary conduct, 5n5, 18n37, 32n57
Qihoo 360 (software), 229
Qualcomm, 576
Quality and safety standards, 555
Quality control efficiencies, 342–343
Quantity commitment discounts, 89–117
attribution test for exclusion, 105–109
bundling and, 102, 104–105
contracts that reference rivals (CRRs), 89–90
demand curves and, 95–97
division of gains from, 98–100
economics of, 94–102
economies of scale and, 103n33
exclusionary conduct and, 102
flaws with attribution test, 111–116
foreclosure and, 102
HMOs and, 95
indicators of harm to competition, 116
legal context, 91–94
liability thresholds and attribution test, 110
loyalty discounts, 100–102
mutual gains from, 95–98
overview, 89–91, 117
policy context, 91–94
potential harm to competition, 102–105
tests for harm to competition, 105
uses of attribution test, 111–116
Queen City Pizza, 343, 402, 408
Raiff, M., 531, 548
Railroad industry, concerted squeezing in, 128
Raising rivals' costs (RRC) theory, 62–70
assessment of, 65–66
counterstrategies, 64
demand effects and, 64
efficiencies and, 64
limitations of, 65–66
overpurchasing model compared, 64
overview, 70
policy implications of, 67–68
strengths of, 65
vertical mergers and, 68–70
Rajgopal, Shivaram, 599
Rambus, 575–576
Ramey, Garey, 516
Ramseyer, J. Mark, 195, 313–316
RAND (Reasonable and non-discriminatory) licensing commitments. See Patents
Rapson, David, 541
Rasmusen, Eric B., 313–316
RealNetworks, 319n44
Reasonable and non-discriminatory (RAND) licensing commitments. See Patents
Recession, effect on formation of cartels, 447–449
Recoupment in predatory pricing, 56–57
Refusals to deal
in China, 221–222
overview, 121
Refusal to supply in Japan, 207–209
Regibeau, Pierre, 555
Remedies
in Japan, 196–199
liquidated damages, 317n40
tying, 347–348
Renren, 245
Repeated auctions, bid rigging in, 507–510
Resale price maintenance (RPM)
anticompetitive motivations for, 292–297
antitrust standard of analysis, 297–298
brand image retail services, control of free-riding in, 280–281
certification services and, 280–281
compensation of retailers for providing interbrand retailing services, 283–286
discretion over retail services with interbrand but not interretailer demand effects, 281–283
effective retail distribution, preserving, 281–292
in EU, 297–301
(p. 638) franchising and, 393, 403–405
free-riding, control of, 278–281
impulse purchases and, 287
manufacturer control of online retailing and, 299–301
manufacturer-motivated, 292–294
manufacturer's distribution network damaged by retailer price discounting, 286–289
minimum advertised price (MAP) policies and, 291–292
of online retailing, 277–301
outlets hypothesis, 287
overview, 277–278, 301
procompetitive rationales for, 298–299
protection of retail distribution network, use for, 289–292
regulation of, 297–301
retailer-motivated, 294–297
retail services, control of free-riding in, 278–279
“showrooming,” 279
slotting allowances and, 285
in United States, 297–301
vertical restraints and, 368, 372–374
Restraint of trade in Japan, 202
Rey, Patrick, 369, 418, 423–424, 429–430
Rey-Stiglitz theorem, 369
Rhône-Poulenc, 449, 457
Richard, J.-F., 502, 511–512
Riley, John G., 500, 564
Riordan, Michael H., 52
Risk dominance as obstacle to tacit collusion, 486–490
Risk-sharing, tying and, 344–345
Rob, Rafael, 492
Roberts, John, 53
Rodger, Barry J., 598
Rojas, Christian, 434
Romania, abuse-of-dominance in, 237
Rosenfield, Andrew M., 469–471
Rotemberg, Julio J., 419, 530, 532
Royalties
patents, 570–571
vertical restraints and, 351
RPM (Resale price maintenance), 277–301. See also Resale price maintenance (RPM)
Rubinstein, Ariel, 488
Rule-of-reason analysis
in China, 216–217
exclusionary conduct, 4–6
Russia
abuse-of-dominance in, 236, 241–244
Federal Antimonopoly Service, 242, 244
Sabourian, Hamid, 492
Saft, Lester F., 343
Saks Fifth Avenue, 367
Salant, Steven W., 431
Salinger, Michael A., 342
Saloner, Garth, 44, 65, 419, 530, 532, 554
Salop, Steven C., 52, 65–66, 127, 312
Samuelson, W., 500
Sanchirico, Chris, 422, 508, 530, 533
Sanctions in abuse-of-dominance cases, 249–250
San Francisco Peace Treaty, 191
Sannikov, Yulij, 421
Sass, Tim R., 394, 398
Saurman, David S., 398
Scalia, Antonin, 172, 415n1
Scharfstein, David, 588
Schechter, Laura, 606
Scheffman, David T., 62, 65–66, 312, 453
Scheinkman, Jose A., 479
Schelling, Thomas, 478
Schenone, P., 479
Scherer, Frederic M., 47, 288, 478
Schinkel, Maarten Pieter, 153
Schmalensee, Richard, 334
Schmidt, Klaus M., 588
Schott Glass, 246
Schultz, Paul H., 523–525, 540, 545, 606
Schumpeter, Joseph, 137, 148, 171
Schwartz, W., 65
Scott Morton, Fiona, 254
Screening, 523–551
Bayesian hypothesis testing and, 525–528
in Bertrand markets, 530, 541
for bid rigging, 602–604
in Brazil, 524, 606
(p. 639) in Canada, 606
cartels and, 430–433
collusive markets other than price screens, based on, 548–549
compliance, use in, 608–609
in corporate governance and compliance, 600–610
in Cournot markets, 530
empirical screens, 534
first and second moments of price distribution, based on, 534–540
in Germany, 608
inference, as problem of, 525–530
in internal monitoring, 607–608
in Italy, 606
in Japan, 606
for market share, 605
mathematical laws, based on, 606
in Mexico, 524, 606
NASDAQ and, 523–525, 540, 606–607
in Netherlands, 606
overview, 523–525, 549–550
for price fixing, 604–605
in South Africa, 606
structural models, based on, 540–548
success of, 606–607
testing versus, 528–530
theoretical screens, 530–534
SCSI (Small Computer Systems Interface), 555
Seabright, Paul, 494
Sealy, 395
Second-price sealed-bid (SPSB) auction, 499–500, 504–505
Securities and Exchange Commission, screening and, 523, 606–607
Seira, E., 513–514
Self-distribution, tying and, 344–345
Selten, Reinhard, 44, 436–437, 487
Senegal, abuse-of-dominance in, 241–242
Senior management, corporate governance and compliance and, 592–593
Separate products test, tying and, 341
Shanda Interactive Entertainment Ltd., 244
Shandong Weifang Shuntong Pharmaceuticals Co., Ltd., 223–224, 245
Shane, Scott, 395–397
Shanghai Xuanting Entertainment Co. Ltd., 244
Shapiro, Carl, 147–148, 554–555
Shavell, Steven, 425
Shenzhen Tencent Computer System Co. Ltd., 228
Sherman Act of 1890
attempted monopolization under, 156
collusion under, 415
competition on merits under, 158
decision theory and, 169
dominant firms under, 153–184. See also Dominant firms
exclusive dealing and, 305–306
franchising under, 395
intellectual property rights and, 140–142
Japanese antitrust law compared, 189
monopolization under, 154–155
patents and, 139n15
predatory pricing under, 40, 45, 52, 58
quality commitment discounts and, 110
special responsibility of dominant firms under, 157
standard setting and, 562, 574
tacit collusion and, 464, 493
tying under, 330–331
vertical restraints under, 372, 379
Shire, 123
“Showrooming,” 279
Sibley, David S., 523
Sidak, Joseph G., 431, 453
“Signal jamming problem,” 27n48
Simcoe, Timothy, 555, 567
Sinclair, 394
Singer Sewing Machine Company, 388
Single-product pricing as exclusionary conduct, 18, 24
Sivadasan, Jagadeesh, 454
Skrzypacz, Andrzej, 421–422, 452, 507–509
Slade, Margaret E., 371, 387
Slotting allowances
resale price maintenance and, 285
unilateral squeezing and, 127n34
as vertical restraints, 352
Slovak Republic, abuse-of-dominance in, 237
“Small but significant and nontransitory increase in price” (SSNIP) test, 201–202, 216
(p. 640) Small Computer Systems Interface (SCSI), 555
Smith, Richard L., II, 398
Snider, Connan, 609
Snyder, Edward A., 89, 317
Soetevent, Adrian, 436
Soft drink industry, exclusionary conduct in, 35
Sokol, D. Daniel, 586, 595, 598
Sonnenfeld, Jeffrey, 599
Sony, 204, 578
South Africa
abuse-of-dominance in, 237–238, 241, 248–249
Competition Authority, 606
Competition Commission, 248
Competition Tribunal, 249
screening in, 606
South African Airways, 248
South Korea, corporate governance and compliance in, 600
Southwest Airlines, 265
Spagnolo, Giancarlo, 420, 429, 457, 588
Spar, Debora L., 445
Special responsibility of dominant firms, 157, 166–167
Spengler, Joseph, 355
Spier, Kathryn E., 315–316
SPSB (Second-price sealed-bid) auction, 499–500, 504–505
Spulber, Daniel F., 431–432
Squeeze claims, 120–129
cartels and, 128–129
concerted squeezing, 122–125, 128–129
essential facilities, 121
in nonintegrated firms, 127
overview, 120–122, 129
price squeezes, 121
railroad industry and, 128
refusals to deal, 121
slotting allowances and, 127n34
unilateral squeezing, 122–127
in vertically integrated firms, 125–127
SSNIP (“Small but significant and nontransitory increase in price”) test, 201–202, 216
Stacchetti, Ennio, 479, 490
Standard auction models, 499–500
Standard Fashion, 379
Standardization Administration of China, 557
Standard Oil Company, 41–42
Standard setting, 554–581
compatibility standards, 555
corruption of process, 561–565
development of standards, 555–557
disparagement of alternative proposals and, 564–565
ex ante bargaining and, 579–580
exclusionary conduct, as venue for, 559
failure to disclose standard-essential patents, 574–577
intellectual property rights and, 567–580
interoperability standards, 555
as joint venture, 559–561
overly broad declarations of standard-essential patents, 577–579
overly broad standard specifications, 577–579
overview, 554–555, 580–581
package licensing of standard-essential patents, 577–579
patent holdup and, 568–569
price fixing, as venue for, 559
quality and safety standards, 555
reasonable and non-discriminatory licensing commitments, 569–574
types of standards, 555
unilaterally determined standards, 565–567
vote stacking and, 561–564
Standard-setting organizations (SSOs)
ANSI-approved SSOs, 557
competition principles, 557–565
innovation and, 144, 146
international SSOs, 556
national SSOs, 557
regional SSOs, 557
Steiner, Peter O., 360
Stewart, Potter, 116
Stigler, George J., 455, 465, 470, 478, 518–519, 530
Stiglitz, Joseph, 369, 423
Stock-based cartel event studies, 595–596
The Strategy of Conflict (Schelling), 478
Strong explicit collusion, 468–477
(p. 641) Structural Impediments Initiative, 194
Sumitomo, 449
Summit Technology, 578
Sun, P., 505
Super 301, 194
Suppiger, 345–346
Suslow, Valerie Y., 442, 443–445, 447–448, 451–452, 454–457, 587
Sustainability of competitive advantage, 264–266
Sutton, John, 454
Sweden, cartels in, 443–444
Switzerland, corporate governance and compliance in, 598
Sylvania, 375
Symeonidis, George, 443, 455
Symmetry, collusion and, 418
Synergies, 267–268
Tacit collusion, 464–494
antitrust litigation and, 493–494
“arrive by reasoning,” 482–486
Bayesian Nash equilibrium, 488
blundering into, 492–493
“burning the dollar” game and, 491
communication in, 466–468
convergent-elimination view, 483–486
defined, 464
direct interaction and, 467n7
economics versus legal terminology, 467
evolution of theory, 477–480
express agreements and, 467n6
focal points and, 477–478, 483–486
folk theorem and, 469, 479–480
game theory and, 478–479
in gasoline industry, 473–474
illustrations, 473–477
initial capital investment as communication, 490–491
initial phase of collusion, 480–493
Nash equilibrium and, 469–470, 480–482, 490–493
observable posted prices and, 473–474
overview, 464–468
plastic bags and, 474–477
price leadership and, 472n17, 477–478
risk dominance as obstacle to, 486–490
self-enforcement of, 479n26, 480–482
strong explicit collusion versus, 468–477
unobservable bid prices and, 474–477
weak explicit collusion versus, 468–477
Taiwan, abuse-of-dominance in, 241
Tan, G., 506
Tan, Tommy C.-C., 483
Tarbell, Ida M., 41
TeleAtlas, 69
Telephone East Corporation, 208
Telser, Lester, 368
Tencent Technology Co. Ltd., 216, 228–230
Tennessee Valley Authority, 603
Terminal Railroad Association of St. Louis, 128
Territorial restraints, 352, 364–365, 369
Testing versus screening, 528–530
Thompson, John S., 596
3M, 91, 105
TIBOR, 607
Tiffany, 367
TOK, 242
Tom Tom, 69
Topel, Robert H., 89
Toshiba, 204
Toshiba Elevator, 206–207
Toys “R” Us, 129
Trade-offs in business strategy, 257–258
Traditional franchising, 390
Transitions Optical, 310–311
Treaty of Rome (1957), 179
Treaty on the Functioning of the European Union (2009)
abuse under, 154–155
collusion under, 415
competition on merits under, 158, 174
decision theory and, 166–171
dominant firms under, 153–184. See also Dominant firms
excessive pricing and, 178–181
exclusive dealing and, 306–307
exploitative abuses under, 155–156
intellectual property rights under, 147n37
interaction between dominant firms and, 176–177
(p. 642) ordoliberalism in, 163–164
predatory pricing under, 46
protection of competitive process under, 158–159, 173–174
special responsibility of dominant firms under, 157
vertical restraints under, 372, 374
Turner, Donald F., 46–47, 49, 54, 493
Twitter, 176
Tyco, 95
Tying, 329–348
in China, 224–225
of complements, 339–341
damages, 347–348
double marginalization and, 339–341
economies of joint provision and, 341–344. See also Economies of joint provision
effects of, 333–338
as exclusionary conduct, 5n6, 19, 25
foreclosure and, 337–338
franchising and, 393, 399–403
in high-technology markets, 345–346
identification of, 329–330
idiosyncratic per se rule and, 330–331
in Japan, 205–207
leverage theory and, 333–334
lock-in doctrine, 332
market power and, 332–333
“metering,” 334–335
minimum conditions for competitive harm, 332–333
misuse and, 345–346
motives, 333–338
overview, 329–330, 348
price discrimination and, 334–337
remedies, 347–348
risk-sharing and, 344–345
self-distribution and, 344–345
separate products test and, 341
statutory coverage, 330–331
variable proportion ties, 336
vertical restraints and, 352, 365–367, 369–370, 376–378
Ukraine, abuse-of-dominance in, 238
UNCTAD (United Nations Conference on Trade and Development), 236
Unilateral squeezing, 122–127
concerted squeezing compared, 122–125
in nonintegrated firms, 127
slotting allowances and, 127n34
in vertically integrated firms, 125–127
Union Oil Company of California, 575
United Kingdom
Board of Trade, 443
cartels in, 443–444
Competition Act of 1998, 598
Competition Commission, 407
corporate governance and compliance in, 597–598, 600
Office of Fair Trading, 407, 598
vertical restraints in, 353
United Nations Conference on Trade and Development (UNCTAD), 236
United Regional Health System, 112–113, 314–315
United States. See also specific Act or governmental entity
abuse-of-dominance standard in, 236
bid rigging in, 501–502
cartels in, 443–446
Chinese enforcement structure compared, 225
corporate governance and compliance in, 597–598
dominant firms in, 153–184. See also Dominant firms
franchising in, 387–392
Japanese enforcement structure compared, 189, 201
resale price maintenance in, 297–301
vertical restraints in, 352–353, 366, 371–384
United States Tobacco Company, 127, 325
Uno, Sosuke, 194
Unobservable bid prices, tacit collusion and, 474–477
U.S. Steel, 58, 193
Usen Broadband Networks, 203
Uzbekistan, abuse-of-dominance in, 237
(p. 643) Value creation and capture framework, 255–261
added value, 260–261
consumer surplus and, 255, 258–260
enhancing value creation, 256–258
“Five Forces,” 255, 258–260
overview, 255–256
producer surplus and, 255, 258–260
rivalry and, 258–260
Van Baal, Sebastian, 279
van Damme, Eric, 488–489, 491
van der Laan, Rob, 595
van Dijk, Mathijs A., 596
Variable proportion ties, 336
Varian, Hal, 606
Varney, Christine, 93
Veith, Tobias, 608
Venture capitalists, patents and, 138
Verboven, Frank, 395, 398, 407
Vertical integration
exclusive dealing and, 304–326. See also Exclusive dealing
franchising and, 387–410. See also Franchising
resale price maintenance (RPM), 277–301. See also Resale price maintenance (RPM)
tying and, 329–348. See also Tying
unilateral squeezing and, 125–127
vertical restraints, 351–384. See also Vertical restraints
Vertical mergers
collusion and, 423–424
RRC theory and, 68–70
Vertical restraints, 351–384
anticompetitive uses, 368–371
in Australia, 384
buyback options, 352
in Canada, 353, 372, 384
collusion and, 423–424
consignment selling arrangements, 352
economics of, 353–367
efficiencies and, 359–364
empirical evidence, 371
exclusive dealing and, 379–381
exclusive territories and, 374–376
exclusivity restraints, 352, 365–367, 369–370
in Germany, 384
Internet distribution restrictions, 367
law versus economics, 381–384
loyalty contracts, 351
Nash equilibrium and, 370
nonlinear pricing schedules, 351
overview, 351–353, 381–384
Pareto efficiency and, 358
price ceilings, 352
price floors, 352
resale price maintenance and, 368, 372–374
royalty contracts, 351
single firm incentives, 359–364
slotting allowances, 352
territorial restraints, 352, 364–365, 369
in United Kingdom, 353
in United States, 352–353, 366, 371–384
VHS videotapes, 558
Vickers, John, 51
Vickrey, W., 500
Video Electronics Standards Association (VESA), 575
Villas-Boas, Sofia, 606, 609–610
VISX, 578
Vita Zahnfabrik, 322–324
Vladivostok Avia Open Co., 242, 244
Volume discounts as exclusionary conduct, 18n37, 24–25
Vote stacking, standard setting and, 561–564
W
Walker, J., 516–517
Walmart, 268, 329
Weak explicit collusion, 468–477
Webb-Pomerene Act of 1918, 445
Weber, R., 499–500
Weifang Huaxin Pharmaceuticals & Trading Co., Ltd., 223–224, 245
WellPoint, 269
Wendy's, 354
Werden, Gregory L., 453, 535, 542
(p. 644) Werlang, S.R. da Costa, 483
Westinghouse, 368, 444
Whinston, Michael D.
on collusion, 416, 419, 434
on exclusive dealing, 311–312, 317
on Japan, 204
on tying, 334
on vertical restraints, 370
White, Andrew, 555
White, Lucy, 423
Wiley, John S., Jr., 313–316
Williams, Michael A., 498, 516, 587
Williamson, Oliver, 47–48, 360
Willig, Robert D., 42, 50
Wilson, Robert, 44
WiMax, 558
Windows (operating system), 175, 372, 378, 561, 565–566
Windows Media Player, 372, 378
Winter, Ralph A., 351, 363–364
Woods, Sean, 555
World Wide Web Consortium, 567, 569
Wuchang Salt, 224–225
Xu Kunlin, 221
Yamamoto, Y., 479
Yamey, Basil, 43
Yang, Huanxing, 423
Yawata Iron and Steel Company, 193
Ye, L., 514, 546, 548
Youle, Thomas, 609
Young, Peyton, 492
Zambia, abuse-of-dominance in, 237, 241
Zanarone, Susanne, 398, 407
Zemsky, P., 505–506
Zhang, X. J., 217
Zingales, Luigi, 599
Zona, Douglas J., 510–511, 513, 541, 545–546