Monopolies Exploit Consumers Through Unfair Pricing, Stifling Competition
In network industries, when a company controls both the production and distribution of a product, they might not always charge high access prices to other companies who want to use their network. If the other companies are just as good as the one in charge of the network, the access price might not be higher than if an outside company controlled the network. However, if the company in charge is much better than the others, they might want to set high access prices to push these other companies out of the market. But, to make the most money, they might not want to push them out completely. This study shows that the bigger the difference in performance between the company in charge and the other companies, the higher the chance of the company in control trying to push them out through high access prices in network industries.