Tying, Bundling, and Double Marginalization

2018 ◽  
Author(s):  
Daniel P. O'Brien ◽  
Greg Shaffer
Keyword(s):  
Double Marginalization

Double Marginalization and Misplacement in Online Advertising

2021 ◽  
Author(s):  
Alexander White ◽  
Kamal Jain ◽  
Shota Ichihashi ◽  
Byung-Cheol Kim
Keyword(s):  
Online Advertising ◽  
Double Marginalization

Does Vertical Separation Necessarily Reduce Quality Discrimination and Increase Welfare?

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Duarte Brito ◽  
Pedro Pereira ◽  
João Vareda
Keyword(s):  
Social Welfare ◽  
Vertical Separation ◽  
Double Marginalization ◽  
Welfare Impact ◽  
Quality Degradation ◽  
Degradation Effect

Abstract We investigate whether vertical separation reduces quality discrimination and increases welfare. Consider an industry consisting of a vertically integrated firm, the incumbent, and an independent retailer, the entrant, which requires access to the services of the incumbent's wholesaler. The wholesaler can discriminate against either of the retailers by supplying it an input of lower quality than its rival. We show that, in our setting, vertical separation of the incumbent reduces discrimination against the entrant's retailer, although it does not guarantee non-discrimination. Furthermore, with vertical separation, the wholesaler may discriminate against the incumbent's retailer. Vertical separation impacts social welfare through two effects. First, through the double-marginalization effect, which is negative. Second, through the quality degradation effect, which can be positive or negative. Hence, the net welfare impact of vertical separation is negative or potentially ambiguous.

scholarly journals Competition with Exclusive Contracts and Market-Share Discounts

2013 ◽  
Vol 103 (6) ◽  
pp. 2384-2411 ◽  
Author(s):  
Giacomo Calzolari ◽  
Vincenzo Denicolò
Keyword(s):  
Incomplete Information ◽  
Market Share ◽  
Competition Policy ◽  
Double Marginalization ◽  
Contractual Arrangements ◽  
Exclusive Contracts ◽  
Market Share Discounts

We analyze firms that compete by means of exclusive contracts and market-share discounts (conditional on the seller's share of customers' total purchases). With incomplete information about demand, firms have a unilateral incentive to use these contractual arrangements to better extract buyers' informational rents. However, exclusive contracts intensify competition, thus reducing prices and profits and (in all Pareto undominated equilibria) increasing welfare. Market-share discounts, by contrast, produce a double marginalization effect that leads to higher prices and harms buyers. We discuss the implications of these results for competition policy. (JEL D43, D83, D86, K21, L14, L42)

Does Vertical Integration Decrease Prices? Evidence from the Paramount Antitrust Case of 1948

2015 ◽  
Vol 7 (2) ◽  
pp. 162-191 ◽  
Author(s):  
Ricard Gil
Keyword(s):  
Vertical Integration ◽  
Double Marginalization ◽  
Antitrust Case ◽  
Ticket Prices ◽  
The Impact ◽  
Unique Dataset

I empirically examine the impact of the 1948 Paramount antitrust case on ticket prices using a unique dataset collected from Variety magazine issues between 1945 and 1955. With information on prices, revenues, and theater ownership for an unbalanced panel of 393 theaters in 26 cities, I find that vertically integrated theaters charged lower prices and sold more admission tickets than nonintegrated theaters. I also find that the rate at which prices increased in theaters was slower while integrated than after vertical divestiture. These findings together with institutional details are consistent with the prediction that vertical integration lowers prices through the elimination of double marginalization. (JEL G34, K21, L11, L22, L42, L82)

scholarly journals Double Marginalization and Vertical Integration

2021 ◽  
Author(s):  
Philippe Choné ◽  
Laurent Linnemer ◽  
Thibaud Vergé
Keyword(s):  
Vertical Integration ◽  
Double Marginalization
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