66 Pages Posted: 25 Jan 1999
Date Written: December 1998
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.
Suggested Citation: 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: https://ssrn.com/abstract=141885