United Shoe Machinery Corporation Research Articles

Barriers to Entry by Lock-in Contracts: Breach Penalties and Specific Investments as Raising Rivals' Costs Strategies

The paper is an extension of the contributions provided by Aghion and Bolton (1987), Chung (1994, 1996), and Spier and Whinston (1995)--among others--to the analysis of the trade-off between the enforcement of incomplete contracts characterised by specific investments and the market foreclosure deriving from the resulting high exit costs. A summarization of the economic principles involved in the antitrust case United States v. United Shoe Machinery Corporation will clarify the nature of such a trade-off. When specific investments are made by the incumbent agent, potential competition will affect the incentive to efficiently invest depending on the nature and the extent of the breach penalties enforced by external authorities. We will conclude that in an incomplete contract framework with unverifiable specific investments but verifiable exit options, the degree of assets specificity in a contractual relationship depends on the nature of the breach penalties enforced by external authority and on the expected efficiency of potential competitors. In such a context antitrust authorities are called to evaluate the market efficiency induced by the penalty regime adopted and the impact of the strategic selection of technological innovations on competitors entry.

United States versus United Shoe Machinery Corporation: On the Merits

A LTHOUGH United States v. United Shoe Machinery Corporation ranks among the most famous of antitrust cases, the economic principles involved in the dispute have remained obscure.' The most prominent economic issues have been (i) the role of leasing as a solution to the durablegoods-monopoly problem and (ii) the exclusionary potential of specific lease provisions. Of these, the durable-goods-monopoly rationale appears to have gained the greater acceptance among economists-an occurrence due in no small part to Chicago School arguments that challenged the logic of anticompetitive exclusion.2

Vertical Restraints as Contract Enforcement Mechanisms

IT is now generally recognized that there are many cases of vertical restraints that do not fit the standard "consumer free riding on special services" theory.1 For example, the widespread use of resale price maintenance in the marketing of brand name clothing cannot be explained as inducing retailers to supply services such as dressing rooms. It is unlikely that consumers must be prevented from trying on clothing free of charge at a full-service retailer before purchasing the clothing at a discount from retailers who do not supply dressing rooms. A number of authors recently have attempted to correct this deficiency in the standard theory by expanding the type of services that vertical restraints may induce retailers to supply and the corresponding retailer free-riding problems.2 The standard economic analysis of how vertical restraints operate to induce desired retailer behavior has remained essentially unchanged, however. The standard analysis assumes that when it is not feasible for a manufacturer to write explicit, court-enforceable contracts with retailers for the supply of particular services, the only alternative mechanism manufacturers can use to induce the supply of desired services is to increase the direct return retailers receive from consumers when those

United States versus United Shoe Machinery Corporation. An Economic Analysis of an Anti-Trust Case.

Journal Article United States versus United Shoe Machinery Corporation. An Economic Analysis of an Anti-Trust Case Get access United States versus United Shoe Machinery Corporation. An economic analysis of an anti-trust case. By Carl Kaysen. (Cambridge, Mass.: Harvard University Press (London: Oxford University Press), 1957. Pp. 404. 52s.) W. Bancroft Clark W. Bancroft Clark Street Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 67, Issue 268, 1 December 1957, Pages 727–729, https://doi.org/10.2307/2227723 Published: 01 December 1957

United States v. United Shoe Machinery Corporation

United States v. United Shoe Machinery Corporation

Book Review: United States v. United Shoe Machinery Corporation

Book Review: United States v. United Shoe Machinery Corporation

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Antitrust Case

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Antitrust Case

United States v. United Shoe Machinery Corporation. An Economic Analysis of an Anti-Trust Case

United States v. United Shoe Machinery Corporation. An Economic Analysis of an Anti-Trust Case

REVIEWS

Book reviewed in this article:The Challenge of Law Reform. By Arthur T. Vanderbilt. [London: Oxford University Press. 1955. vii and 194 pp. 28s. net.]A History of The School of Law Columbia University. By the Staff of the Foundation for Research in Legal History under the direction of Julius Goebel, Jr. [Columbia University Press; London: Cumberlege. 1955. viii and 511 and (index) 12 pp. £2 8s. net.]The Marshall Reader: The Life and Contributions of Chief Justice John Marshall. Bicentenary edition. Selected and edited by Erwin C. Surrency, Associate Professor of Law, Temple University. Docket series, Vol. 3. [New York City: Oceana Publications. 1955. vi and 248 and (index) 2 pp. Paper bound 8s., cloth bound 25s. net.]Anti‐Trust Laws: A Comparative Symposium. Edited by W. Friedmann. University of Toronto Faculty of Law Comparative Law Series, Vol. 3. [London: Stevens & Sons, Ltd. 1956. 635 pp. (including preface, appendices, and index). £4 net.]United States v. United Shoe Machinery Corporation. An Economic Analysis of an Anti‐Trust Case. By Carl Kaysen. [Harvard University Press; London: Cumberlege. 1956. xii and 404 pp. £2 12s. net.]British Colonial Judges. A study by the Inns of Court Conservative and Unionist Society. [London: Sweet & Maxwell, Ltd. 1956. 24 pp. 2s. net.]The Law of State Succession. By D. P. O'Connell. [Cambridge University Press. 1956. xl and 425 pp. 45s. net.]Cases and Materials on International Law. By Lester B. Orfield and Edward D. Re. [London: Stevens & Sons, Ltd. Published under the auspices of The London Institute of World Affairs. 1956. xi and 765 pp. £4 4s. net.]Laws Concerning the Nationality of Ships. Compiled by the Codification Division of the Office of Legal Affairs of the Secretariat of the United Nations. [New York: United Nations; London: H.M. Stationery Office. 1956. x and 203 pp. 11s. net.]Private Foreign Investments: Legal and Economic Realities. By Seymour J. Rubin. [Baltimore: The Johns Hopkins Press; London: Cumberlege. 1956. x and 108 pp. 28s.net.]Crime and Social Action. By George Godwin. [London: Watts & Co. 1956. vi and 277 pp. (including index). 18s. net.]Birdman of Alcatraz. By Thomas E. Gaddis. [London: Victor Gollancz, Ltd. 1956. 254 pp. 16s. net.]An Introduction to Evidence. By G. D. Nokes, Professor of Law in the University of London. Second edition. [London: Sweet & Maxwell, Ltd. 1956. xxxvi and 480 pp. 37s. 6d. net.]Hanson's Death Duties. By Henry E. Smith, ll.b.(Lond.), Assistant Controller of Death Duties. Tenth edition. [London: Sweet & Maxwell, Ltd. 1956. lxxvi and 1214 pp. £6 6s. net.]Retirement and Other Annuities Under the Finance Act, 1956. Current Law Guide, No. 12. By H. G. S. Plunkett, of Gray's Inn, Barrister‐at‐Law of the Oxford Circuit (formerly one of H.M. Inspectors of Taxes) and G. A. Hosking, f.i.a., a.t.i.i., f.s.s., f.i.s. [London: Sweet & Maxwell, Ltd.; Stevens & Sons, Ltd. 1956. viii and 111 pp. 9s. 6d. net.]Nationality and Statelessness in International Law. By P. Weis. [London: Stevens & Sons, Ltd. 1956. xxvii and 338 pp. £3 3s. net.]The 1956 Income Tax Legislation. By A. S. Silke, m.com.(Hons) (Cape Town), c.a.(s.a.). [Cape Town and Johannesburg: Juta & Co., Ltd. 1956. 150 pp. 42s. net.]Income Tax Law and Practice. By Cecil A. Newport, f.a.c.c.a. and H. G. S. Plunkett, Barrister‐at‐Law (formerly one of H.M. Inspectors of Taxes). Twenty‐seventh edition. [London: Sweet & Maxwell, Ltd. 1956. xxxix and 413 and (index) 29 pp. 30s. net.]Chitty's Queen's Bench Forms. Eighteenth edition. By R. F. Burnand and D. Boland, with a foreword by the Rt. Hon. Lord Goddard. [London: Sweet & Maxwell, Ltd. 1956. lx and 1222 and index. £7 9s. 6d. post paid.]Contracts to Make Wills. By Bertel M. Sparks. [New York: University Press. 1956. 230 pp. $5.00.]

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-trust Case. Carl Kaysen

<i>United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-trust Case</i>. Carl Kaysen

United States v. United Shoe Machinery Corporation

United States v. United Shoe Machinery Corporation

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-Trust Case

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-Trust Case

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-Trust Case

United States v. United Shoe Machinery Corporation: An Economic Analysis of an Anti-Trust Case

United States v. United Shoe Machinery Corporation, An Economic Analysis of an Antitrust Case

United States v. United Shoe Machinery Corporation, An Economic Analysis of an Antitrust Case

The Shoe Machinery Case and the Problem of the Good Trust

Introduction, 287. — I. Violation of the Sherman Act by the United Shoe Machinery Corporation, 287. — II. Different doctrines and methods of dealing with the good trust, 292. — III. Definition and measurement of monopoly power or market control, 295. — IV. Conclusion, 304.