Arbeitspapier

A Leverage Theory of Tying in Two-Sided Markets

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.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 6073

Klassifikation
Wirtschaft
Market Structure, Pricing, and Design: General
Market Structure, Firm Strategy, and Market Performance: General
Regulation and Industrial Policy: General
Thema
tying
leverage of monopoly power
two-sided markets
zero pricing
non-negative pricing constraint

Ereignis
Geistige Schöpfung
(wer)
Choi, Jay Pil
Jeon, Doh-Shin
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2016

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Choi, Jay Pil
  • Jeon, Doh-Shin
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2016

Ähnliche Objekte (12)