The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries

Dennis Carlton and Michael Waldman

No 6831, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates how the tying of complementary products can be used to preserve and extend monopoly positions. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly position in future periods. We then show using related arguments how a monopolist in one market can employ tying to extend its monopoly position into a newly emerging market. The analysis focuses on the importance of entry costs and network externalities. The paper includes a discussion of antitrust implications.

Date: 1998-12
Note: IO
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Published as Carlton, Dennis W. and Michael Waldman. "The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries," Rand Journal of Economics, 2002, v33(2,Summer), 194-220.

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Related works:
Journal Article: The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries (2002)
Working Paper: The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries (1998)
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