How Economics Can Improve Antitrust Doctrine towards Tie-In Sales: Comment on Tirole's 'An Analysis of Tying Cases: A Primer'

Competition Policy International, Vol. 1, No. 1, pp. 27-40, Spring 2005

15 Pages Posted: 21 Apr 2005  

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

Abstract

Given the focus on tie-in sales in several recent antitrust cases, economists have turned their attention to the motivations and consequences of tying, significantly improving our understanding. Tirole has written an excellent primer focused on what we know about tying and what he believes is desirable antitrust policy concerning the practice. Although we agree with most of Tirole's arguments, there are two topics for which our perspective is somewhat different. First, we would add one situation to the ones identified by Tirole in which tying can harm competition and reduce welfare. Second, in his policy discussion Tirole stops short in some places of using theory to provide concrete guidance and restraint to antitrust enforcers. In other places his suggestions could lead to less rather than more clarity. We explain our reasons for preferring a more limited role for antitrust intervention than Tirole appears to recommend.

Keywords: Tying, Exclusion, Predation

JEL Classification: D4

Suggested Citation

Carlton , Dennis W. and Waldman, Michael, How Economics Can Improve Antitrust Doctrine towards Tie-In Sales: Comment on Tirole's 'An Analysis of Tying Cases: A Primer'. Competition Policy International, Vol. 1, No. 1, pp. 27-40, Spring 2005. Available at SSRN: https://ssrn.com/abstract=702645

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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