How Economics Can Improve Antitrust Doctrine towards Tie-In Sales: Comment on Tirole's 'An Analysis of Tying Cases: A Primer'
Dennis W. Carlton
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
Cornell University - Samuel Curtis Johnson Graduate School of Management
Competition Policy International, Vol. 1, No. 1, pp. 27-40, Spring 2005
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.
Number of Pages in PDF File: 15
Keywords: Tying, Exclusion, Predation
JEL Classification: D4
Date posted: April 21, 2005