American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Does Vertical Integration Decrease Prices? Evidence from the Paramount Antitrust Case of 1948
American Economic Journal: Economic Policy
vol. 7,
no. 2, May 2015
(pp. 162–91)
Abstract
I empirically examine the impact of the 1948 Paramount antitrust case on ticket prices using a unique dataset collected from Variety magazine issues between 1945 and 1955. With information on prices, revenues, and theater ownership for an unbalanced panel of 393 theaters in 26 cities, I find that vertically integrated theaters charged lower prices and sold more admission tickets than nonintegrated theaters. I also find that the rate at which prices increased in theaters was slower while integrated than after vertical divestiture. These findings together with institutional details are consistent with the prediction that vertical integration lowers prices through the elimination of double marginalization. (JEL G34, K21, L11, L22, L42, L82)Citation
Gil, Ricard. 2015. "Does Vertical Integration Decrease Prices? Evidence from the Paramount Antitrust Case of 1948." American Economic Journal: Economic Policy, 7 (2): 162–91. DOI: 10.1257/pol.20120245Additional Materials
JEL Classification
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- K21 Antitrust Law
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L22 Firm Organization and Market Structure
- L42 Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- L82 Entertainment; Media
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