AB-2010-55-3-04-LAFONTAINE, Transaction Cost Economics and Vertical Market Restrictions—Evidence By Francine Lafontaine and Margaret E. Slade

We examine the empirical research on interfirm contracts that has
been inspired by Oliver Williamson’s work on transaction costs. We
eschew the vast and supportive empirical literature on the make-orbuy
decision, covered elsewhere, focusing instead on vertical market
restrictions. We organize our discussion around specific restrictions,
emphasizing the evidence concerning restrictions, such as contract
duration and adjustment clauses, that have been studied most
through transaction cost lenses, but also the findings from studies of
vertical restraints, namely those restrictions that have been the focus
of antitrust policy. We conclude with some general thoughts about
how what one can learn from these studies can inform antitrust
policy regarding vertical market restrictions.