The Review of Economics and Statistics Vol. 76 No. 3 1994
An Empirical Test of the Free Rider and Market Power Hypotheses: A Comment
Abstract
Willard F. Mueller and Frederick E. Geithman (1991) test the competing free-rider (efficiency) and market-power explanations of certain vertical restraints once used by the Sealy mattress company and declared illegal after 1980. They estimate that eliminating the restraints increased sales and argue that this supports only the market-power explanation. However, Mueller and Geithman overlook the rise in Sealy's profits that occurred after 1980, a fact which renders their test inconclusive.
- DOI
- 10.2307/2109985
- Volume
- 76
- Issue
- 3
- Pages
- 586
- Sources
- openalex crossref