50 Hastings L.J. 573 (1998-1999)
Procompetitive Theories of Vertical Control

handle is hein.journals/hastlj50 and id is 591 raw text is: Procompetitive Theories of Vertical
Control
by
ANDY C. M. CHEN* and KEIrH N. HYLTON**
Table of Contents
Introduction   ............................................................................................ 575
I. Vertical Control in Competitive Markets: Vertical Integration
and the Principal-Agent Dilemma ............................................. 580
A. The Principal-Agent Dilemma and Adverse Selection .... 581
B. The Principal-Agent Dilemma and Moral Hazard ........... 584
C. Vertical Integration and the Solution to the Principal-
A gent D  ilem m a ..................................................................... 585
11. Vertical Control in Competitive Markets: Vertical
Integration and Transaction-Cost Considerations ................... 586
A. The Costs of Searching for Qualified Contracting
Partners .................................................................................. 586
B. The Costs of Reduced Flexibility ........................................ 587
C. The Costs of Opportunism .................................................. 588
D. Vertical Integration as a Means to Minimize
Transaction   Costs .................................................................. 590
III. Vertical Control in Non-Competitive Markets: Vertical
Integration and the Successive Monopoly Problem ................. 592
A. Competitive Price and Output Level .................................. 592
B. Price and Output Levels Under a Monopolized
Upstream Market .................................................................. 594
C. The Successive Monopoly Problem .................................... 595
D. Vertical Integration Under the Technology of
Variable-Proportions Production ....................................... 598
IV. Vertical Restraints as Substitutes for Vertical Integration in
Competitive Markets ................................................................... 599
A. Exclusive Dealing Arrangements and the Adverse-

*Assistant Professor of Law, Tamkang University, Taipei, Taiwan.
** Professor of Law, Boston University, Boston, Massachusetts.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 2,700 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Access to this content requires a subscription. Please visit the following page to request a quote or trial:

Already a HeinOnline Subscriber?