Egli, Alain (January 2005). On Stability in Competition: Tying and Horizontal Product Differentiation (Discussion Papers 05-01). Bern: Department of Economics
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We combine Hotelling’s model of product differentiation with tie-in sales. Tie-in sales condition the sale of one good upon the purchase of another good. In equilibrium firms choose zero product differentiation. Due to the tying structure no firm can gain the whole market by a
small price reduction. Then we address the following questions: Can a firm with monopoly power in one market leverage this power into another market where it faces competition. What is the effect from tying on the profits of the monopolist’s rival. In our model this effect is ambiguous.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Egli, Alain |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Discussion Papers |
Publisher: |
Department of Economics |
Language: |
English |
Submitter: |
Lars Tschannen |
Date Deposited: |
21 Sep 2020 09:41 |
Last Modified: |
05 Dec 2022 15:39 |
JEL Classification: |
D43, L11, L12, L13 |
BORIS DOI: |
10.7892/boris.145653 |
URI: |
https://boris.unibe.ch/id/eprint/145653 |
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