There are many strategic product decisions business managers must make regarding product offerings, price and pricing structures, product characteristics and quality, research and development, and marketing, among other things. Included in these strategic considerations is how to sell one’s products. It is not uncommon for a manufacturer to choose to “tie” its consumers’ purchase of one product to a required purchase of another. For example, for many years Visa and MasterCard tied a merchant’s acceptance of their respective credit cards to acceptance of their respective debit products. They explicitly would not allow a merchant to accept only their credit products.
It is important for a business manager to have a clear understanding of the potential economic and legal ramifications of a “tying” decision. This paper is intended to describe the current state and generally anticipated future state of the law and economics of the business practice of tying so that business practitioners may make better, more informed decisions.
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