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Tying, Investment, and the Dynamic Leverage Theory
Oleh:
Stefanadis, Christodoulos
;
Jay, Pil Choi
Jenis:
Article from Bulletin/Magazine
Dalam koleksi:
The Rand Journal of Economics vol. 32 no. 1 (2001)
,
page 52-71.
Topik:
investment
;
tying
;
investment
;
dynamic leverage theory
Ketersediaan
Perpustakaan Pusat (Semanggi)
Nomor Panggil:
RR10.6
Non-tandon:
1 (dapat dipinjam: 0)
Tandon:
tidak ada
Lihat Detail Induk
Isi artikel
The idea that an incumbent supplier may tie two complementary products to fend off potential entrants is popular among practitioners yet is not fully understood in formal economic theory. We make sense of the argument by formally deriving a dynamic version of the old leverage doctrine. It is shown that when an incumbent monopolist faces the threat of entry in all complementary components, tying may make the prospects of successful entry less certain, discouraging rivals from investing and innovating. Tie - in sales may reduce consumer and total economic welfare.
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