 Consumer welfare, licensing, and exclusive dealing with vertically- and horizontally-differentiated productsYen-Ju Lin International Review of Economics & Finance, 2022, vol. 80, issue C, 147-158 Abstract: We explore the existence of anticompetitive exclusive dealing when the downstream firm produces both vertically-and horizontally products. Our study shows that the licensing scheme has crucial ramifications for considering the possibility of exclusive dealing. For royalty licensing, the less the horizontal differentiation or the similar the quality of the two products is, the less possibility there is for exclusive dealing. However, under two-part tariff licensing, a pure fixed fee is preferred by a licensor, it is more likely to foster exclusive dealing. Moreover, we explore the consumer welfare implications and find that royalty licensing may prevent anticompetitive exclusion and lead to greater consumer surplus, which runs against the conventional wisdom that fixed fee licensing is socially desirable. In addition, royalty licensing can be favorable to the outside licensor if the licensor can commit at the beginning of the game. Keywords: Exclusive dealing; Two-part tariffs; Licensing; Multi-input multi-product firm; Vertically-and horizontally-differentiated products (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:80:y:2022:i:c:p:147-158 DOI: 10.1016/j.iref.2022.02.035 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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