@article{Just:7194,
      recid = {7194},
      author = {Just, Richard E. and Rausser, Gordon C.},
      title = {General Equilibrium in Vertical Market Structures:  Overselling versus Overbuying},
      address = {2007},
      number = {1557-2016-133211},
      series = {CUDARE Working Paper},
      pages = {42},
      year = {2007},
      abstract = {The lens used by the courts and much of the antitrust  literature on predatory selling and/or buying is based on  partial equilibrium methodology. We demonstrate that such  methodology is unreliable for assessments of  predatory
monopoly or monopsony conduct. In contrast to the  typical two-stage dynamic analysis involving a predation  period followed by a recoupment period, we advance a  general equilibrium analysis that demonstrates the critical  role of related industries and markets. Substitutability  versus complementarity of both inputs and outputs is  critical. With either monopolistic or monopsonistic  market
power (but not both), neither predatory overselling  nor predatory overbuying is profitably sustainable.  Two-stage predation/recoupment is profitable only with  irreversibility in production and cost functions, unlike  typical estimated forms from the production economic  literature. However, when the market structure admits both  monopolistic and monopsonistic behavior, predatory  overbuying can be profitably sustainable while overselling  cannot. Useful distinctions are drawn between contract  versus non-contract markets for input markets.},
      url = {http://ageconsearch.umn.edu/record/7194},
      doi = {https://doi.org/10.22004/ag.econ.7194},
}