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Exclusivity and exclusion on platform Markets


Reference:

Chowdhury, S. M. and Martin, S., 2017. Exclusivity and exclusion on platform Markets. Journal of Economics, 120 (2), pp. 95-118.

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Official URL:

https://doi.org/10.1007/s00712-016-0499-z

Abstract

We examine conditions under which an exclusive license granted by the upstream producer of a component that some consumers regard as essential to one of two potential suppliers of a downstream platform market can make the unlicensed supplier unprofitable, although both firms would be profitable if both were licensed. If downstream varieties are close substitutes, an exclusive license need not be exclusionary. If downstream varieties are highly differentiated, an exclusive license is exclusionary, but it is not in the interest of the upstream firm to grant an exclusive license. For intermediate levels of product differentiation, an exclusive license is exclusionary and maximizes the upstream firm’s payoff.

Details

Item Type Articles
CreatorsChowdhury, S. M.and Martin, S.
DOI10.1007/s00712-016-0499-z
DepartmentsFaculty of Humanities & Social Sciences > Economics
RefereedYes
StatusPublished
ID Code57147

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