Tying to Foreclose in Two-Sided Markets
This paper analyzes the effect of tied-in sales by an essential goods monopolist in a two-sided market. In a two-sided market, the essential goods monopolist may tie a good essential for users, such as an operating system, with a platform, such as a media player, in the user side of the market, to extract profits not from the user side, but from the developer side of the market. From this simple idea, we build a simple two-sided market model and show how the essential goods monopolist may tie a platform with the essential goods on the user side of the market to foreclose a rival firm from the developer side of the market. We also analyze various welfare impacts of tying and discuss the antitrust implications.
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Volume (Year): 15 (2015)
Issue (Month): 4 (October)
Pages: 1919-1937
| Handle: | RePEc:bpj:bejeap:v:15:y:2015:i:4:p:1919-1937:n:12 |
| Contact details of provider: | Web page: https://www.degruyter.com
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| Order Information: | Web: https://www.degruyter.com/view/j/bejeap |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christiaan Hogendorn & Stephen Ka Yat Yuen, 2009.
"PLATFORM COMPETITION WITH 'MUST-HAVE' COMPONENTS -super-,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 57(2), pages 294-318, 06.
- Christiaan Hogendorn & Ka Yat Yuen, 2004. "Platform Competition with “Must-Have” Components," Wesleyan Economics Working Papers 2004-003, Wesleyan University, Department of Economics.
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