Monopolization with Must-Haves
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Date
2024
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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. ( JEL D43, K21, L13, L14, L42, L81) )