Rebates as incentives to exclusivity
We show how rebates (or fidelity discounts) that take the form of lump-sum payments made to retailers can be used by an incumbent manufacturer to achieve exclusivity and to deter the entry of a more efficient rival. The results, which hold whatever the degree of differentiation between retailers and whatever the cost advantage of the entrant, are found, despite minimizing asymmetries that may favour the incumbent. As such, there is no need to introduce buyers' disorganization, discriminatory offers, economies of scale, non-coincident markets, or liquidated damages to find that exclusivity can lead to anti-competitive effects.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 39 (2006)
Issue (Month): 2 (May)
|Contact details of provider:|| Postal: |
Web page: http://economics.ca/cje/
More information through EDIRC
|Order Information:|| Web: http://economics.ca/en/membership.php Email: |
When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:39:y:2006:i:2:p:477-492. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler)
If references are entirely missing, you can add them using this form.