Learning from the Past: The Lessons of Vietnam, IBM, and Tying

Michael Salinger, Apr 01, 2006

With a major set of hearings scheduled in the United States on the antitrust treatment of single-firm conduct, economists have an opportunity to provide analysis that informs policy. Yet, the opportunity will be lost if economic analysis does not provide insights into how to distinguish anticompetitive from pro-competitive behavior. The authors argue that the economics literature on one type of single-firm conduct”tying”has been less influential than it should have been, and examine whether there are lessons to be learned from that failure. The authors argue that the two principal causes are 1) the almost complete neglect of competitive tying (while focusing heavily on anticompetitive tying) and 2) an excessive reliance on theory alone.