The Leverage Theory of Tying Revisited
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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