Monopolistic bottlenecks stifle competition, harming consumers despite regulatory efforts.
This research looks into how a single powerful company controls a crucial part of an industry that other companies need to operate. They explore what happens when regulations force this powerful company to be separate, legally, from the others. The study finds that when the powerful company has some control over the separate part, it may not always do what's best for everyone involved. By changing how much the powerful company owns of this separate part, the total amount of goods produced can go up or down, depending on the situation. When rules are stricter about how the powerful company can influence this separate part, it typically leads to more goods being produced. The researchers also discovered that how much the powerful company influences the separate part might change based on how much of it they actually own.