Tying in Two-Sided Markets with Multi-Homing

Choi, Jay Pil, Jullien, Bruno and Lefouili, Yassine (2017) Tying in Two-Sided Markets with Multi-Homing: Corrigendum and Comment. TSE Working Paper, n. 17-850, Toulouse

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Official URL: http://tse-fr.eu/pub/32110

Abstract

We identify two issues in Choi's (2010) paper on tying in two-sided markets published in this Journal, and provide solutions to both of them. First, we point out that the equilibrium in the absence of tying requires more restrictive conditions and does not satisfy a natural equilibrium refinement criterion. We offer an alternative timing structure that validates the equilibrium derived in Choi (2010) under the conditions provided there. Second, we show that his equilibrium analysis with tying ignores a profitable deviation. We rectify this analysis under our alternative timing structure and derive the (mixed-strategy) equilibrium with tying. We also show by means of simulations that tying is welfare-enhancing whenever it is profitable, which is consistent with the main finding in Choi (2010).

Item Type: Monograph (Working Paper)
Sub-title: Corrigendum and Comment
Language: English
Date: October 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Tying, Two-Sided Markets, Multi-Homing
JEL codes: D4 - Market Structure and Pricing
L1 - Market Structure, Firm Strategy, and Market Performance
L5 - Regulation and Industrial Policy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Apr 2018 07:43
Last Modified: 17 Apr 2018 07:43
OAI ID: oai:tse-fr.eu:32110
URI: http://publications.ut-capitole.fr/id/eprint/25712

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