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American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

Monopolization with Must-Haves

  • Enrique Ide
  • Juan-Pablo Montero
American Economic Journal: Microeconomics
vol. 16, no. 3, August 2024
(pp. 284–320)
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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.20230018

Additional 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
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