Tying by a Non-monopolist
AbstractThis paper explores tying in the situation where a multi-product firm without monopoly power competes against several single-product firms. I consider two markets: one for a horizontally differentiated good, the other for a homogeneous good. As opposed to the widely accepted opinion that tying may be profitable only in the case of monopoly power, I show that under reasonable assumptions tying is profitable for the multi-product firm and has a negative welfare effect.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp225.
Date of creation: Jun 2004
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More information through EDIRC
Industrial organization; Anti-trust policy; Multi-product firm; Tying; Bundling.;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
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- Dennis W. Carlton & Michael Waldman, 1998.
"The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries,"
University of Chicago - George G. Stigler Center for Study of Economy and State
145, Chicago - Center for Study of Economy and State.
- Dennis W. Carlton & Michael Waldman, 2002. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 194-220, Summer.
- Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," NBER Working Papers 6831, National Bureau of Economic Research, Inc.
- Denicolo, Vincenzo, 2000. "Compatibility and Bundling with Generalist and Specialist Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 48(2), pages 177-88, June.
- Carmen Matutes & Pierre Regibeau, 1988. ""Mix and Match": Product Compatibility without Network Externalities," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 221-234, Summer.
- Seidmann, Daniel J, 1991. "Bundling as a Facilitating Device: A Reinterpretation of Leverage Theory," Economica, London School of Economics and Political Science, vol. 58(232), pages 491-99, November.
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