Orders to supply as substitutes for commitments to aftermarkets

A number of recent antitrust cases in Canada and other countries have invol ved durable goods manufacturers refusing to supply proprietary parts to ind ependent service organizations. Earlier work suggested that the inability o f manufacturers to commit to low aftermarket prices creates an inefficiency that might be removed by a judicial order to supply. This paper examines t his view critically with a specific model of repairs and demonstrates that under plausible conditions there is no welfare loss due to the inability to commit It goes on to show that an order to supply can create its own disto rtion and welfare loss if it encourages inefficient substitution of inputs in the production of repairs. JEL Classification: L42, L12.