Abstract

http://ssrn.com/abstract=1730354
 
 

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Tying, Bundling, and Loyalty/Requirement Rebates


Nicholas Economides


New York University - Leonard N. Stern School of Business - Department of Economics

February 2011

RESEARCH HANDBOOK ON THE ECONOMICS OF ANTITRUST LAW, Einer Elhauge, ed.,Edward Elgar Publishing, Forthcoming
NET Institute Working Paper No. #10-26
NYU Law and Economics Research Paper No. 11-02

Abstract:     
I discuss the impact of tying, bundling, and loyalty/requirement rebates on consumer surplus in the affected markets. I show that the Chicago School Theory of a single monopoly surplus that justifies tying, bundling, and loyalty/requirement rebates on the basis of efficiency typically fails. Thus, tying, bundling, and loyalty/requirement rebates can be used to extract consumer surplus and enhance profit of firms with market power. I discuss the various setups when this occurs.

Number of Pages in PDF File: 40

Keywords: tying, ties, bundling, bundled rebates, loyalty discounts, loyalty requirement rebates, single monopoly surplus, monopolization, market power, foreclosure, antitrust

JEL Classification: C72, D42, D43, K21, L12, L40, L41, L42

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Date posted: December 25, 2010 ; Last revised: May 16, 2011

Suggested Citation

Economides, Nicholas, Tying, Bundling, and Loyalty/Requirement Rebates (February 2011). RESEARCH HANDBOOK ON THE ECONOMICS OF ANTITRUST LAW, Einer Elhauge, ed.,Edward Elgar Publishing, Forthcoming; NET Institute Working Paper No. #10-26; NYU Law and Economics Research Paper No. 11-02. Available at SSRN: http://ssrn.com/abstract=1730354 or http://dx.doi.org/10.2139/ssrn.1730354

Contact Information

Nicholas Economides (Contact Author)
New York University - Leonard N. Stern School of Business - Department of Economics
44 West 4th Street
New York, NY 10012
United States
212-998-0864 (Phone)
212-995-4218 (Fax)
HOME PAGE: http://www.stern.nyu.edu/networks/
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