Wednesday, September 24, 2008
Posted by D. Daniel Sokol
ABSTRACT: This paper focuses on the question of whether the task of distributing the welfare between producers and consumers is in the domain or jurisprudence of courts or antitrust agencies. Indeed, these foundations are far away from the understanding introduced by Chicago school when the matter in hand is about price discrimination. But contrary to this, public choice framework outlines the allocation of tasks about distributing the welfare by means of macro economic measures such as taxing. So it is paradoxical to accept certain kinds of price discrimination are illegal even if they were proved to increase efficiency and total welfare.
In this paper, I give the definition of price discrimination and tying by using economic approach. Types of tying practices which is not deemed to be price discrimination are also presented. In addition the case law about tying as price discrimination is a part of the study. And essentially, antitrust policy choices in order to distinguish tying arrangements which are efficient and social welfare practices are discussed.