Abstract

http://ssrn.com/abstract=141885
 
 

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The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries


Dennis W. Carlton


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Michael Waldman


Cornell University - Samuel Curtis Johnson Graduate School of Management

December 1998

NBER Working Paper No. w6831

Abstract:     
This paper investigates how the tying of complementary products can be used to preserve and extend monopoly positions. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly position in future periods. We then show using related arguments how a monopolist in one market can employ tying to extend its monopoly position into a newly emerging market. The analysis focuses on the importance of entry costs and network externalities. The paper includes a discussion of antitrust implications.

Number of Pages in PDF File: 66

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Date posted: January 25, 1999  

Suggested Citation

Carlton , Dennis W. and Waldman, Michael, The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries (December 1998). NBER Working Paper No. w6831. Available at SSRN: http://ssrn.com/abstract=141885

Contact Information

Dennis W. Carlton (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Michael Waldman
Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )
Ithaca, NY 14853
United States
607-255-8631 (Phone)
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