Tying in Two-Sided Markets with Multi-Homing: Corrigendum and Comment

Jay Choi, Bruno Jullien and Yassine Lefouili

No 17-850, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We identify two issues in Choi's (2010) paper on tying in two-sided markets published in this Journal, and provide solutions to both of them. First, we point out that the equilibrium in the absence of tying requires more restrictive conditions and does not satisfy a natural equilibrium refinement criterion. We offer an alternative timing structure that validates the equilibrium derived in Choi (2010) under the conditions provided there. Second, we show that his equilibrium analysis with tying ignores a profitable deviation. We rectify this analysis under our alternative timing structure and derive the (mixed-strategy) equilibrium with tying. We also show by means of simulations that tying is welfare-enhancing whenever it is profitable, which is consistent with the main finding in Choi (2010).

Keywords: Tying; Two-Sided Markets; Multi-Homing (search for similar items in EconPapers)
JEL-codes: D4 L1 L5 (search for similar items in EconPapers)
Date: 2017-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Journal Article: CORRIGENDUM (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:32110

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