Template-type: ReDIF-Paper 1.0
Author-Name: Chiara Fumagalli 
Author-Name: Massimo Motta
Title: On the Use of Price-Cost Tests in Loyalty Discounts and Exclusive Dealing Arrangements: Which Implications from Economic Theory?
Abstract: Recent cases in the US (Meritor, Eisai) and in the EU (Intel ) have revived the debate on the use of price-cost tests in loyalty discount cases. We draw on existing recent economic theories of exclusion and develop new formal material to argue that economics alone does not justify applying a price-cost test to predation but not to loyalty discounts. Still, the latter contain features (they reference rivals and allow to discriminate across buyers and/or units bought) that have a higher exclusionary potential than the former, and this may well warrant closer scrutiny and more severe treatment from antitrust agencies and courts.
Classification-JEL: K21, L41
Keywords: Market-Share Discounts, Ine?cient Foreclosure, Exclusive Dealing, Antitrust Policy
Length: 35 pages 
Number: 1636
Creation-Date: 2016
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp1636.pdf
File-Format: application/pdf
File-Size: 490
Handle: RePEc:baf:cbafwp:cbafwp1636