American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Monopolization with Must-Haves
American Economic Journal: Microeconomics
(pp. 284–320)
Abstract
An increasing number of monopolization cases have been constructed around the notion of "must-have" items: products that distributors must carry to "compete effectively." Motivated by these cases, we consider a multiproduct setting where upstream suppliers sell their products through competing distributors offering one-stop-shopping convenience to consumers. We show the emergence of products that distributors cannot afford not to carry if their rivals do. A supplier of such products can exploit this must-have property, along with tying and exclusivity provisions, to monopolize adjacent, otherwise-competitive markets. Policy interventions that ban tying or exclusivity provisions may prove ineffective or even backfire.Citation
Ide, Enrique, and Juan-Pablo Montero. 2024. "Monopolization with Must-Haves." American Economic Journal: Microeconomics 16 (3): 284–320. DOI: 10.1257/mic.20230018Additional Materials
JEL Classification
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- L14 Transactional Relationships; Contracts and Reputation; Networks
- L42 Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- L81 Retail and Wholesale Trade; e-Commerce