Journal article
Upstream bundling and leverage of market power
- Abstract:
- We present a novel rationale for bundling in vertical relations. In many markets, upstream firms compete to be in the best downstream slots (e.g., the best shelf in a retail store or the default application on a platform). If a multi-product upstream firm faces competition for a subset of its products, we show that tying the monopolised product with the competitive ones can reduce upstream rivals’ willingness to offer slotting fees to retailers. This strategy does not rely on entry deterrence and can be achieved through contractual or even virtual tying. The model is particularly relevant to the Google-Android case.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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(Preview, Version of record, 287.0KB, Terms of use)
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- Publisher copy:
- 10.1093/ej/ueab024
Authors
- Publisher:
- Oxford University Press
- Journal:
- The Economic Journal More from this journal
- Volume:
- 131
- Issue:
- 640
- Pages:
- 3122–3144
- Publication date:
- 2021-04-06
- Acceptance date:
- 2021-03-19
- DOI:
- EISSN:
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1468-0297
- ISSN:
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0013-0133
- Language:
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English
- Keywords:
- Pubs id:
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1167325
- Local pid:
-
pubs:1167325
- Deposit date:
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2021-03-13
Terms of use
- Copyright holder:
- de Cornière and Taylor
- Copyright date:
- 2021
- Rights statement:
- © The Author(s) 2021. Published by Oxford University Press on behalf of Royal Economic Society. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
- Licence:
- CC Attribution (CC BY)
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