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The Leverage Theory of Tying Revisited

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Author Info
Margaret E. Slade

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Abstract

I assess the private profitability of tying under circumstances where the standard efficiency defenses do not necessarily hold and demonstrate that tying is profitable under a wide range of circumstances. I also examine data from the Canadian newspaper- advertising industry and argue that price discrimination, cost saving, and quality control are unlikely motives for tying in this market. Nevertheless, with newspapers, tying and monopoly power go hand in hand.

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Paper provided by UBC Department of Economics in its series Old UBC Departmental Papers with number 9709.

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Length: 26 pages
Date of creation: Jan 1997
Date of revision:
Handle: RePEc:ubc:bcecwp:9709

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Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
L4 - Industrial Organization - - Antitrust Issues and Policies
L6 - Industrial Organization - - Industry Studies: Manufacturing
D4 - Microeconomics - - Market Structure and Pricing

Cited by:
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  1. Thibaud Vergé, 2003. "Portfolio Effects and Merger Control: Full-line Forcing as an Entry Deterrence Strategy," Industrial Organization 0301010, EconWPA. [Downloadable!]
  2. Stephen Martin, 1998. "Strategic and Welfare Implications of Bundling," CIE Discussion Papers 1998-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
    Other versions:
  3. Thibaud Verge, 2002. "Portfolio Analysis in European Merger Control: An Economic Analysis," The Centre for Market and Public Organisation 02/046, Department of Economics, University of Bristol, UK. [Downloadable!]
  4. Thibaud Vergé, 2001. "Multiproduct Monopolist and Full-line Forcing: The Efficiency Argument Revisited," Economics Bulletin, Economics Bulletin, vol. 12, pages 1-9. [Downloadable!]
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This page was last updated on 2009-11-21.


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