Jeon, Doh-Shin and Choi, Jay Pil
(2021)
A leverage theory of tying in two-sided markets with non-negative price constraints.
American Economic Journal: Microeconomics, vol. 13 (n° 1).
pp. 283-337.
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Abstract
Partly motivated by the recent antitrust investigations concerning Google, we develop a leverage theory of tying in two-sided markets. We analyze incentives for a monopolist to tie its monopolized product with another product in a two-sided market. Tying provides a mechanism to circumvent the non-negative price constraint in the tied product market without inviting an aggressive response as the rival firm faces the non-negative price constraint. We identify conditions under which tying in two-sided markets is profitable and explore its welfare implications. Our mechanism can be more widely applied to any markets in which sales to consumers in one market can generate additional revenues that cannot be competed away due to non-negative price constraints.
Item Type: | Article |
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Language: | English |
Date: | February 2021 |
Refereed: | Yes |
JEL Classification: | D42 - Monopoly K21 - Antitrust Law L12 - Monopoly; Monopolization Strategies L41 - Monopolization; Horizontal Anticompetitive Practices |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 20 Apr 2020 13:28 |
Last Modified: | 10 Jun 2021 08:01 |
OAI Identifier: | oai:tse-fr.eu:123589 |
URI: | https://publications.ut-capitole.fr/id/eprint/32821 |
Available Versions of this Item
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A Leverage Theory of Tying in Two-Sided Markets. (deposited 06 Sep 2016 08:08)
- A leverage theory of tying in two-sided markets with non-negative price constraints. (deposited 20 Apr 2020 13:28) [Currently Displayed]