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- W3123867924 abstract "• Ignoring transaction costs and non-linear pricing can lead to erroneous antitrust decisions. • Some common free riding justifications for vertical restrictions may no longer apply given promotion monitoring improvements. • Nash equilibria and Nash-in Nash models often make oversimplified assumptions about contract form, biasing their findings. • The AMEX case likely will lead to confusion in applying antitrust doctrines to vaguely judicially-defined two-sided markets. • Granting consumers property rights in data, without barring exclusive sales to one firm, may not address antitrust concerns. This paper evaluates current antitrust policy in light of our current understanding of how transaction costs influence the ability of firms and consumers to deal with market power. The paper shows how the failure to consider transaction costs can lead to erroneous policy decisions. Many models employed today make simplifying assumptions about transaction costs that can lead to biased results in analyzing vertical and horizontal issues. The increased ability to monitor the effect of promotional behavior should cause us to reexamine whether free riding justifications, previously accepted as justifications for various vertical restrictions, still hold. Nash bargaining and Nash-in-Nash models raise concerns about the simplified assumptions assumed in which supposedly high transaction costs restrict the choice and form of the assumed competitive alternatives. The increasing importance of two-sided markets together with an understanding of transaction costs is needed to understand antitrust conduct in those markets. The recent Amex case is likely to lead to confused litigation in these types of markets. Finally, the establishment of property rights for a consumer to his or her data could fail to remedy antitrust concerns that certain dominant firms are immune to competition because consumers do not own their data unless that property right is limited so that consumers cannot exclusively sell their data to one firm." @default.
- W3123867924 created "2021-02-01" @default.
- W3123867924 creator A5017878139 @default.
- W3123867924 date "2020-12-01" @default.
- W3123867924 modified "2023-09-24" @default.
- W3123867924 title "Transaction costs and competition policy" @default.
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- W3123867924 doi "https://doi.org/10.1016/j.ijindorg.2019.102539" @default.
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