Exclusivity and exclusion on platform markets

M. Chowdhury, Subhasish and Martin, Stephen (2017) Exclusivity and exclusion on platform markets. Journal of Economics, 120 (2). 95–118. ISSN 0931-8658

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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.

Item Type: Article
Uncontrolled Keywords: exclusion,essential components,exclusive contract,platform market
Faculty \ School: Faculty of Social Sciences > School of Economics
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Depositing User: Pure Connector
Date Deposited: 24 Sep 2016 00:00
Last Modified: 18 Jul 2024 11:30
URI: https://ueaeprints.uea.ac.uk/id/eprint/59766
DOI: 10.1007/s00712-016-0499-z


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