Exclusive Dealing and the Market Power of Buyers
AbstractThis paper examines the effects of exclusive dealing contracts offered by an incumbent distributor. The traditional literature has focused solely on exclusive dealing contracts offered by incumbent manufacturers, which derive multiple equilibria within homogeneous price competition models. In contrast, exclusive dealing contracts offered by distributors generate unique equilibrium, wherein an efficient entrant can be excluded as long as distributors have sufficient bargaining power. We also introduce an entrant in the manufacturing side, and show that the upstream entry may promote exclusion of the efficient entry by an exclusive dealing contract.
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Bibliographic InfoArticle provided by De Gruyter in its journal Asian Journal of Law and Economics.
Volume (Year): 2 (2011)
Issue (Month): 1 (April)
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Web page: http://www.degruyter.com
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- Hiroshi Kitamura & Noriaki Matsushima & Misato Sato, 2013. "How Does Downstream Firms' Efficiency Affect Exclusive Supply Agreements?," ISER Discussion Paper 0878, Institute of Social and Economic Research, Osaka University.
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