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. This article makes sense of the argument by formally deriving a dynamic version of the old leverage...

We examine a mechanism by which bundling may inefficiently deter entry into the market. The model considers an incumbent monopolist in two complementary components that faces a series of entry attempts by rivals. It is shown that the incumbent can practice bundling to buttress its monopoly...

The delivery and payment of bills over the Internet could offer many advantages—low processing costs and enhanced marketing opportunities for billers, savings in time and postage for customers. Nevertheless, electronic billing has not found favor with potential users. A lack of coordination...

With the growing appeal of cross-border trading in Europe, efforts are under way to establish consolidated exchanges that offer trading in stocks from many European countries. An analysis of these evolving pan-European exchanges suggests that consolidation could reduce the costs and...

The idea that an industry with sunk costs may be contestable even in the absence of long-term contracts has received little attention from formal economic theory yet is popular among monopolists facing antitrust suits. The paper formally illustrates the argument. In an infinitely repeated game,...

The argument that import protection can become export promotion is examined from the marketing standpoint. The cornerstone of the analysis is the presence of horizontal differentiation. In the model, protection by the home government allows domestic firms to sell their products to the portion of...