2,806 works, 150 years of economic thought. Each one summarized and searchable, with cited passages inside.
Does eliminating successive monopoly mark-ups require merging the firms that impose them? Fritz Machlup and Martha Taber’s article separates the pricing case for vertical integration from technological economies and asks what independent firms can accomplish through contracts. The crucial distinction is concrete: bargaining over price alone differs from agreeing on both price and quantity. Where firms can negotiate the joint-profit-maximizing output, common ownership need not lower consumer prices further; where they cannot control quantities, the result may differ. By connecting economic models to firms’ actual capacity to bargain and commit, the authors clarify when integration can remove output restrictions—and why that gain does not settle the policy question. A merger that improves pricing within an existing monopoly structure may also make that structure harder to challenge.