Tying Law and Policy: A Decision Theoretic Approach

Competition Policy and Antitrust

Article Snapshot


Keith Hylton and Michael A. Salinger


Boston Univ. School of Law Working Paper No. 01-04; Antitrust Law Journal, Vol. 69, 2001


This paper looks at how economists’ views of “tying” have changed.

Policy Relevance

Economic theory can show that common business practices might sometimes be harmful. But there is a gap between theory and reality. Courts relying on this theory would do more harm than good, punishing behavior that often helps consumers.

Main Points

  • Tying is when a firm requires customers to purchase product B when they buy product A.

  • Early on, “classical” antitrust theory assumed that tying was an attempt to increase monopoly power, and was bad (“per se illegality”); the consensus today rejects this rule.

  • “Chicago School” economics showed that tying was a common practice that often benefits consumers, and argued that courts should assume it was good (and therefore should be “per se legal”).

  • “Post-Chicago” economists use game theory to show that tying can sometimes help and sometimes harm consumers.

  • Judges are likely to make mistakes in assessing complicated economic cases. The best legal rule will keep errors and the harm from errors as low as possible.


  • Because tying is common and usually helps consumers in reality, rules against tying could harm consumers even if judicial errors were rare.

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