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December 09, 2015
Michelle Cleary and Michael Cragg Co-Author Article on the Impact of Consumer Insistence on Market Power for Perspectives in Antitrust

As illustrated by the recent decision in the US Department of Justice’s case against American Express, insistence can be a critical issue in deciding an antitrust case. A new article by Brattle economists Michelle Cleary and Michael Cragg addresses the far-reaching economic implications of insistence for antitrust matters.

Insistence is an extreme form of customer loyalty that limits switching because consumers insist on specific products. This can bestow significant market power to owners (or their distributors), and can lead to anticompetitive behaviors to maintain or extend market power, such as raising rivals' costs, impeding entry, or exclusive dealing. Some common incentives that often promote competition, such as loyalty rewards and most-favored nation programs, can also play a role in the economics of insistence.

The authors explore these issues, including a discussion of insistence in the context of two-sided markets.

The article was published in the November 2015 issue of Perspectives in Antitrust and is available for download below.