The Leverage Theory of Tying Revisited: Evidence from Newspaper Advertising

C-Tier
Journal: Southern Economic Journal
Year: 1998
Volume: 65
Issue: 2
Pages: 204-222

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Data from the Canadian newspaper‐advertising industry is used to assess the private profitability of tying in a market where the standard efficiency motives (e.g., price discrimination, cost saving, and quality control) are unlikely to apply. The empirical assessment is based on a model of leveraging in which suppliers of the tied good are paid a commission rather than a fee for service. This model demonstrates that tying is profitable under a wide range of circumstances. Furthermore, it is found that, with newspapers, tying and monopoly power go hand in hand.

Technical Details

RePEc Handle
repec:wly:soecon:v:65:y:1998:i:2:p:204-222
Journal Field
General
Author Count
1
Added to Database
2026-01-29