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

66 Pages Posted: 25 Jan 1999  

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

Multiple version iconThere are 2 versions of this paper

Date Written: December 1998

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.

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

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)

Paper statistics

Downloads
137
Rank
172,522
Abstract Views
2,407