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The Leverage Theory of Tying Revisited

Author

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  • Slade, M. E.

Abstract

I assess the private profitability of tying under circumstances where the standard efficiency defenses do not necessarily hold and demonstrate that tying is profitable under a wide range of circumstances. I also examine data from the Canadian newspaper-advertising industry and argue that price discrimination, cost saving, and quality control are unlikely motives for tying in this market. Nevertheless, with newspapers, tying and monopoly power go hand in hand.

Suggested Citation

  • Slade, M. E., 1995. "The Leverage Theory of Tying Revisited," G.R.E.Q.A.M. 97b02, Universite Aix-Marseille III.
    • Handle: RePEc:fth:aixmeq:97b02
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    Cited by:

    1. Martin, Stephen, 1999. "Strategic and welfare implications of bundling," Economics Letters, Elsevier, vol. 62(3), pages 371-376, March.
    2. Thibaud Vergé, 2001. "Multiproduct Monopolist and Full-line Forcing: The Efficiency Argument Revisited," Economics Bulletin, AccessEcon, vol. 12(4), pages 1-9.

    More about this item

    Keywords

    ANTITRUST LEGISLATION ; MARKET STRUCTURE ; MANUFACTURING;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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