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Date: 23 February , 2012 (Thursday)
Time : 10:30am - 12:00noon
Language : English
Venue : Room 910, KKL Building, The University of Hong Kong
Presented By : Professor Kenneth S. Corts, Rotman School of Management, University of Toronto
Seminar title : How the source of the entrant's advantage limits entry-deterring tying
Abstract:

 

I revisit the simplest model of entry-deterring tying, Example 1 from Whinston's (1990) seminal paper, but allow the potential entrant to have either a cost advantage or a willingness-to-pay (WTP) advantage relative to the incumbent. I show that tying is more effective against an entrant with a cost advantage than an entrant with a WTP advantage since an entrant with a large WTP advantage may be able to induce the buyer to buy both the tied bundle and the entrant's product. I also show that tying but failing to deter entry is more costly when facing an entrant with a cost advantage than when facing an entrant with a WTP advantage. For a firm facing uncertainty about, for example, the entrant's entry costs, this makes tying a less attractive entry deterrent against a cost-advantaged entrant. These results shed light on the important policy question of which markets are most likely to be susceptible to entry-deterring tying.

All Interested are Welcomed
The paper will be available on request.
   
       
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