COMPOUND PRICING

COMPOUND PRICING

Compound pricing makes the price or availability of some goods conditional on the purchase (or non‐purchase) of other goods. Tie‐ins and requirements contracts, two well‐known examples, are analyzed here. Contrary to some opinion, such practices need not be innocuous or benign. This analysis shows t...

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Veröffentlicht in:Economic inquiry 1987-04, Vol.25 (2), p.315-339
1. Verfasser: MCGEE, JOHN S.
Format: Artikel
Sprache:eng
Schlagworte:
Antitrust
Antitrust laws
Comparative studies
Economic theory
Mathematical models
Policy
Pricing
Tying arrangements
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Beschreibung
Zusammenfassung:Compound pricing makes the price or availability of some goods conditional on the purchase (or non‐purchase) of other goods. Tie‐ins and requirements contracts, two well‐known examples, are analyzed here. Contrary to some opinion, such practices need not be innocuous or benign. This analysis shows that compound pricing can produce price, output, profit, and welfare results that are practically indistinguishable from those got when a firm increases its monopoly power in more obvious and direct ways. By some standards, the requirements and exclusive dealing contracts analyzed here are predatory.
ISSN:0095-2583
1465-7295
DOI:10.1111/j.1465-7295.1987.tb00742.x