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Exclusivity and Exclusion on Platform Markets

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  • Subhasish M. Chowdhury
  • Stephen Martin

Abstract

We examine conditions under which a platform ?rm can exclude rivals by bundling a product that some on one side of the market re- gard as essential with its platform, and pursue implications for market performance. We show that the impact of an exclusive dealing con- tract between the upstream ?rm and one of the downstream ?rms on market performance depends on the strength of consumer preferences for the products of the two downstream ?rms and the relative size of the market segment for which the complementary consumption good is essential. In some cases this may reduce the net social welfare.

Suggested Citation

  • Subhasish M. Chowdhury & Stephen Martin, 2010. "Exclusivity and Exclusion on Platform Markets," Purdue University Economics Working Papers 1254, Purdue University, Department of Economics.
    • Handle: RePEc:pur:prukra:1254
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    3. Jihui Chen, 2011. "Do Exclusivity Arrangments Harm Consumers?," Working Paper Series 20111001, Illinois State University, Department of Economics.
    4. Jihui Chen & Qiang Fu, 2017. "Do exclusivity arrangements harm consumers?," Journal of Regulatory Economics, Springer, vol. 51(3), pages 311-339, June.
    5. Juan Manuel Sánchez-Cartas, 2021. "Intellectual property and taxation of digital platforms," Journal of Economics, Springer, vol. 132(3), pages 197-221, April.
    6. Fuyuki Saruta, 2022. "Exclusive Contracts and Multihoming Agents in Two-sided Markets," Discussion Paper Series DP2022-26, Research Institute for Economics & Business Administration, Kobe University.
    7. Kim, Nayeong & Lee, Dongmin & Cho, Seonghwan & Moon, Junghoon, 2023. "The effect of exclusive distribution on the sales of ready-made meals in online retail," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    8. Saruta, Fuyuki, 2021. "Exclusive contracts and multihoming agents in two-sided markets," MPRA Paper 110070, University Library of Munich, Germany.
    9. David S. Evans & Richard Schmalensee, 2013. "The Antitrust Analysis of Multi-Sided Platform Businesses," NBER Working Papers 18783, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    exclusion; essential components; exclusive contract; platform market;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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