The Review of Economics and Statistics
The asymmetric information characterizing markets for professional services has been used to justify tying requirements and other restrictions on the business practices of professionals. In this paper the prices and quality effects of state restrictions that prohibit the fitting of contact lenses by independent opticians and thereby tie the sale of contact lenses to the services of ophthalmologists and optometrists are estimated. The results suggest that prices are significantly higher in markets with tying requirements, controlling for differences in quality and variations in other state commercial practice restrictions. The tying requirements and the commercial practice restrictions, however, appear to have statistically insignificant effects on quality.
© The MIT Press
Haas-Wilson, Deborah, "Tying Requirements in Markets with Many Sellers: The Contact Lens Industry" (1987). Economics: Faculty Publications, Smith College, Northampton, MA.