The iPhone goes downstream: mandatory universal distribution

Apple’s original decision to market iPhones using a single downstream vendor prompted calls for mandatory universal distribution (MUD), whereby all downstream vendors would sell the iPhone under the same contract terms. The upstream monopoly may want either one or more downstream vendors, and, in either case, consumer welfare may be higher with either one or more firms. If the income elasticity of demand for the new good is greater than the income elasticity of the existing generic good, the MUD requirements leads to a higher equilibrium price for both the new good and the generic, and therefore lowers consumer welfare.


Issue Date:
Dec 15 2011
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/123636
Total Pages:
35
JEL Codes:
L12; L13; L42
Series Statement:
CUDARE Working Papers
1125




 Record created 2017-04-01, last modified 2017-08-26

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