Exclusive Contracts, Loss to Delay and Incentives to Invest
AbstractWe model a new effect of exclusivity on non-contractible investments in buyer/seller relationships. By restricting the buyer to purchase from only one seller, exclusivity increases the buyer’s costs of haggling during renegotiation and hence the seller’s relative bargaining power and bargaining share. This in turn fosters the seller’s incentives to invest even for investments that are fully specific to the relationship (‘internal investments’), in contrast to a recent finding by Segal and Whinston (2000b).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4525.
Date of creation: Aug 2004
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Giancarlo Spagnolo & Christian Groh, 2004. "Exclusive Contracts, Loss to Delay and Incentives to Invest," Econometric Society 2004 North American Winter Meetings 509, Econometric Society.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Fumagalli, Chiara & Motta, Massimo & Rønde, Thomas, 2009.
"Exclusive dealing: the interaction between foreclosure and investment promotion,"
CEPR Discussion Papers
7240, C.E.P.R. Discussion Papers.
- Chiara Fumagalli & Massimo Motta & Thomas Rønde, 2009. "Exclusive Dealing: The Interaction between Foreclosure and Investment Promotion," Working Papers 2009.120, Fondazione Eni Enrico Mattei.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.