Vertical Restrictions and Antitrust Policy: What About the Evidence?

James Cooper, Luke Froeb, Daniel O’Brien, Michael Vita, Sep 01, 2005

Until theory can be used to determine how likely it is that a restraint will lead to an anticompetitive outcome, decision makers will be left with a considerable amount of uncertainty. In this world, enforcement decisions should be guided by prior beliefs and loss functions. The authors review of the existing empirical evidence which informs their priors  suggests that vertical restraints are likely to be benign or welfare-enhancing.

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