Tuesday, February 12, 2013

Consequences of VRs

Consequences of VRs - If vertical restraints are used to overcome incentive problems and internalize externalities, prices to consumers should be lower or qualities should be enhanced. If vertical restraints are used to lessen competition at some level of the vertical structure through foreclosing, disadvantaging rivals, or facilitating collusion, prices to consumers should be higher and quantities sold smaller than in the absence of such restraints

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