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. Journal of Industrial Economics, 65 (4). pp. 872-886.

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Official URL: http://tse-fr.eu/pub/32111

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: Article
Sub-title: Corrigendum and Comment
Language: English
Date: December 2017
Refereed: Yes
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)
Site: UT1
Date Deposited: 13 Apr 2018 09:18
Last Modified: 24 Jan 2019 00:16
OAI ID: oai:tse-fr.eu:32111
URI: http://publications.ut-capitole.fr/id/eprint/25713

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