{"title":"Double marginalization in the pricing of complements: The case of US freight railroads","authors":"Alexei Alexandrov, Russell Pittman, Olga Ukhaneva","doi":"10.1111/jems.12604","DOIUrl":null,"url":null,"abstract":"Monopolists selling complementary products charge a higher price in a static equilibrium than a single (multiproduct) monopolist would, reducing both the industry profits and consumer surplus. Firms could instead reach a Pareto improvement by lowering prices to the single‐monopolist level. We analyze pricing data of railroad coal shipping in the United States. We compare a coal producer that needs to ship from A to C, with the route passing through B, in two cases: (1) the same railroad owning AB and BC and (2) different railroads owning AB and BC. We do not find that the price in case (2) is higher than the price in case (1), suggesting that the complementary monopolist pricing inefficiency is absent in this market. Our findings are robust to propensity score blocking, causal machine learning algorithms, and difference‐in‐differences analysis. Our results have implications for vertical mergers, tragedy of the anticommons, mergers of firms selling complements, elimination of double marginalization, and royalty stacking and patent thickets.","PeriodicalId":47931,"journal":{"name":"Journal of Economics & Management Strategy","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2024-07-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics & Management Strategy","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1111/jems.12604","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Monopolists selling complementary products charge a higher price in a static equilibrium than a single (multiproduct) monopolist would, reducing both the industry profits and consumer surplus. Firms could instead reach a Pareto improvement by lowering prices to the single‐monopolist level. We analyze pricing data of railroad coal shipping in the United States. We compare a coal producer that needs to ship from A to C, with the route passing through B, in two cases: (1) the same railroad owning AB and BC and (2) different railroads owning AB and BC. We do not find that the price in case (2) is higher than the price in case (1), suggesting that the complementary monopolist pricing inefficiency is absent in this market. Our findings are robust to propensity score blocking, causal machine learning algorithms, and difference‐in‐differences analysis. Our results have implications for vertical mergers, tragedy of the anticommons, mergers of firms selling complements, elimination of double marginalization, and royalty stacking and patent thickets.
在静态均衡中,销售互补产品的垄断者比单一(多产品)垄断者收取更高的价格,从而减少了行业利润和消费者剩余。相反,企业可以通过将价格降到单一垄断者的水平来实现帕累托改进。我们分析了美国铁路煤炭运输的定价数据。我们比较了两种情况下煤炭生产商从 A 地运往 C 地的运输路线:(1) 同一条铁路拥有 AB 和 BC;(2) 不同的铁路拥有 AB 和 BC。我们没有发现第(2)种情况下的价格高于第(1)种情况下的价格,这表明该市场不存在互补性垄断定价低效。我们的研究结果对倾向得分阻断、因果机器学习算法和差分分析都是稳健的。我们的研究结果对纵向兼并、反公地悲剧、销售互补品的企业兼并、消除双重边际化、版税堆叠和专利丛林都有影响。