EconPapers    
Economics at your fingertips  
 

Tying and freebies in two-sided markets

Andrea Amelio and Bruno Jullien ()

International Journal of Industrial Organization, 2012, vol. 30, issue 5, 436-446

Abstract: In two-sided markets where platforms are constrained to set non-negative prices, tying can be deployed by platforms as a tool to introduce implicit subsidies. For a monopoly, this raises participation and benefits consumers on both sides. In a duopoly, tying on one side makes a platform more or less competitive on the other side depending on externalities. Tying may not be ex-ante optimal while the competing platform may benefit from it. The impact on consumers' surplus depends on whether competition is softened or intensified on the profitable side. Moreover tying increases total welfare if network effects are strong.

Keywords: Tying; Two-sided market; Platform competition (search for similar items in EconPapers)
JEL-codes: L11 L13 L42 L81 L86 D43 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167718712000343
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Tying and Freebies in Two-Sided Markets (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:30:y:2012:i:5:p:436-446

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-11-30
Handle: RePEc:eee:indorg:v:30:y:2012:i:5:p:436-446