Consider a durable goods producer that has the option of monopolizing an aftermarket such as repair for its own product. An important question is whether such monopolization reduces welfare? We show that the anwer to this question is frequently no. In particular, we explore three models that illustrate various ways in which aftermarket monopolization can reduce inefficiencies and thus increase ...

In recent years, progressive public intellectuals and prominent scholars have asserted that monopoly power lies at the root of wealth inequality and that increases in antitrust enforcement are necessary to stem its rising tide. This claim is misguided. Exercises of market power have complex, crosscutting effects that undermine the generality of the monopoly regressivity claim. Contrary to what ...

We analyze oligopolistic competition in a multi-period dynamic setting for goods with network effects. Two or more infinitely-lived firms produce incompatible products differentiated in their inherent quality. Consumers live for a single period and receive the network effect of the previous period’s sales. We show existence and characterize Markov perfect equilibria that are unique given market...

We show information technology (in short IT) caused rising monopoly power and rising income and wealth inequality since the 1970's. Our reasoning proceeds in four steps. step 1 examines surplus wealth the difference between firm’s wealth (equity and debt) and capital employed. Surplus wealth rose from -$0.59 Trillion in 1974 to $24 Trillion in 2015 which is 82% of total stock market value, refl...

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We study a sequential auction of two objects with two bidders, where the winner of the package obtains a synergy from the second object. If reselling after the two auctions occurs, it proceeds as either monopoly or monopsony take-it-or-leave-it offer. We find that a post-auction resale has a significant impact on bidding strategies in the auctions: Under the monopoly offer, there does not exist...

Slotting fees -fixed charges paid by food manufacturers to retailers for access to the retail market -are both increasingly common and increasingly controversial. This note shows how imperfectly competitive retailers and a monopolistic supplier of one good can use "naked" slotting fees -charges imposed on competitive suppliers of other goods -to achieve a vertically integrated multi-good monopoly.

This paper studies monopoly extraction of a nonrenewable resource with the presence of a competitively supplied capacity constrained renewable substitute. The monopolist staves off the renewable supply when the latter becomes competitive and then lets the resource price jump up. © 2013 Elsevier B.V. All rights reserved.