This paper investigates the contractual choice between exclusive dealing and common agency in a simple international oligopoly model where products are sold through intermediaries. We find that when trade barriers are high domestic firms tend to adopt exclusive dealing contracts, whereas trade liberalization may lead firms to choose common agency. Social welfare can be raised by prohibiting exclusive dealing (common agency) when trade barriers are high (low) and products are close substitutes.
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Paper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics working papers with number
2004,09.
Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
B. Douglas Bernheim & Michael D. Whinston, 1998.
"Exclusive Dealing,"
Journal of Political Economy,
University of Chicago Press, vol. 106(1), pages 64-103, February.
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B. Douglas Bernheim & Michael D. Whinston, 1996.
"Exclusive Dealing,"
NBER Working Papers
5666, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
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