TY - JOUR
T1 - Tying and innovation
T2 - A dynamic analysis of tying arrangements
AU - Choi, Jay Pil
N1 - Copyright:
Copyright 2008 Elsevier B.V., All rights reserved.
PY - 2004/1
Y1 - 2004/1
N2 - This paper analyses the effects of tying arrangements on R and D incentives. It shows that tying is a means through which a firm can commit to more aggressive R and D investment in the tied goods market. Tying also has the strategic effect of reducing rivals' incentives to invest in R and D. The strategy of tying is a profitable one if the gains, via an increased share of dynamic rents in the tied goods market, exceed the losses that result from intensified price competition in the market. The welfare implications of tying, and consequently the appropriate antitrust policy, are discussed.
AB - This paper analyses the effects of tying arrangements on R and D incentives. It shows that tying is a means through which a firm can commit to more aggressive R and D investment in the tied goods market. Tying also has the strategic effect of reducing rivals' incentives to invest in R and D. The strategy of tying is a profitable one if the gains, via an increased share of dynamic rents in the tied goods market, exceed the losses that result from intensified price competition in the market. The welfare implications of tying, and consequently the appropriate antitrust policy, are discussed.
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U2 - 10.1046/j.0013-0133.2003.00178.x
DO - 10.1046/j.0013-0133.2003.00178.x
M3 - Article
AN - SCOPUS:0842279661
VL - 114
SP - 83
EP - 101
JO - Economic Journal
JF - Economic Journal
SN - 0013-0133
IS - 492
ER -