The welfare gains from a refusal to deal

Soheil R. Nadimi and Dennis L. Weisman

Applied Economics Letters, 2020, vol. 27, issue 9, 708-713

Abstract: A vertically integrated provider (VIP) initially has a duty to deal with a rival at unregulated upstream and downstream prices. The duty to deal is subsequently terminated which enables the VIP to acquire the rival and serve as a two-product, downstream monopolist. We find that the refusal to deal is welfare-enhancing given that consumer and producer surplus increase.

Date: 2020
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DOI: 10.1080/13504851.2019.1644431

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