Pré-Publication, Document De Travail (Working Paper) Année : 2024

Tying with network effects

Jay Pil Choi
  • Fonction : Auteur
  • PersonId : 1511176
Doh-Shin Jeon
  • Fonction : Auteur
  • PersonId : 1234711
Michael Dennis Whinston
  • Fonction : Auteur
  • PersonId : 1511177

Résumé

We develop a leverage theory of tying in markets with network effects. When a monopolist in one market cannot perfectly extract surplus from consumers, tying can be a mechanism through which unexploited consumer surplus is used as a demand-side leverage to create a “quasi-installed base” advantage in another market characterized by network effects. Our mechanism does not require any precommitment to tying; rather, tying emerges as a best response that lowers the quality of tied-market rivals. While tying can lead to exclusion of tied-market rivals, it can also expand use of the tying product, leading to ambiguous welfare effects.
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Dates et versions

hal-04960506 , version 1 (21-02-2025)

Identifiants

  • HAL Id : hal-04960506 , version 1

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Jay Pil Choi, Doh-Shin Jeon, Michael Dennis Whinston. Tying with network effects. 2024. ⟨hal-04960506⟩
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