ISSN 1936-5349 (print)
ISSN 1936-5357 (online)
HARVARD
JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS
THE FAILED RESURRECTION OF
THE SINGLE MONOPOLY
PROFIT THEORY
Einer Elhauge
Discussion Paper No. 664
02/2010
Harvard Law School
Cambridge, MA 02138
This paper can be downloaded without charge from:
The Harvard John M. Olin Discussion Paper Series:
http://www.law.harvard.edu/programs/olin_center/
The Social Science Research Network Electronic Paper Collection:
http://ssrn.com/abstract=1551470
THE FAILED RESURRECTION
OF THE SINGLE MONOPOLY PROFIT THEORY
6 COMPETITION POLICY INTERNATIONAL (forthcoming Spring 2010)
Einer Elhauge*
Harvard University
JEL Codes: C72, K21, L12, L40, L41, L42. Keywords: Tying, Ties, Bundled Discounts,
Bundled Rebates, Mixed Bundling, Single Monopoly Profit, Price Discrimination, Loyalty
Discounts, Loyalty Rebates, Exclusionary, Foreclosure, Equally Efficient Rival, Monopolization,
Anticompetitive, Restraints of Trade, Antitrust.
* Einer Elhauge is the Petrie Professor of Law at Harvard Law School, author of U.S.
Antitrust Law & Economics, co-author of Global Antitrust Law & Economics, and editor of the
forthcoming Research Handbook on the Economics of Antitrust Law.
ABSTRACT
Various arguments attempting to resurrect the single monopoly profit theory of tying
have been made, but none are successful. The Seabright claim that it is supported by a lack
of empirical proof fails because the single monopoly profit theory is an impossibility theory,
and my recommended exception applies to whatever empirical extent the necessary
conditions for that theory actually exist. The claim that a lack of empirical proof favors
critics of current tying doctrine also fails because it is the critics that favor a categorical rule
(of legality either for all ties or for all ties that lack substantial foreclosure) that requires
empirical proof across the category. In contrast, current tying doctrine uses no categorical
rule, bu