ARTICLE: INFRAMARGINAL CONSUMERS AND THE PER SE LEGALITY OF VERTICAL RESTRAINTS. Skip over navigation
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Copyright (c) 1988 Hofstra Law Review
Hofstra Law Review

ARTICLE: INFRAMARGINAL CONSUMERS AND THE PER SE LEGALITY OF VERTICAL RESTRAINTS.

FALL, 1988

17 Hofstra L. Rev. 137

Author

Don Boudreaux * and Robert B. Ekelund, Jr. **

Excerpt

I. INTRODUCTION

Although antitrust law has never strictly followed the latest fashions in economic theory, the theory of industrial organization has had an important, if sometimes ambiguous, impact on the law. This has been the case with regard to the impact of price and non-price vertical restraints agreed upon by upstream suppliers and downstream distributors. 1 Over the past twenty-five years, the courts have vacillated in their treatment of price and non-price forms of contractual vertical integration. 2 Recently, the Supreme Court declared that non-contractual, non-specific price restraints do not constitute a per se violation of the antitrust laws. 3 However, the Court presently maintains that restraints imposed to fix resale prices (resale price maintenance or r.p.m.) are per se illegal, 4 while geographic and other non-price arrangements between upstream manufacturers and their downstream retailers are subject to a rule-of-reason analysis. 5

Economic theory relating to price and non-price vertical restraints has similarly been at loose ends. Following Lester Telser 6 and Robert Bork, 7 a number of theorists have argued that many forms of non-price intrabrand restraints 8 are actually pro-competitive because they strengthen and maintain interbrand competition. 9 Several influential opposing viewpoints have surfaced in the recent literature on the topic, however, including that of Professor William Comanor. 10 Comanor argues that a theoretically untoward restraint on inframarginal consumers 11 supports a more vigilant stance by the courts against non-price restraints. 12 Comanor supports his argument by postulating that the economic welfare of inframarginal ...
 
 
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