Exclusive Dealing Contracts by Distributors
The existing literature about exclusive dealing contracts has focused on cases where an incumbent manufacturer oÂ¤ers exclusive contracts to deter an entry. In contrast, we consider the case where an incumbent distributor oÂ¤ers exclusive dealing contracts to deter an entry. Exclusive dealing contracts by a distributor are less eÂ¤ective. We will show that the outcome of such contracts is quite diÂ¤erent from the outcomes in the traditional literature. If the number of manufacturers is suÂ¢ ciently high, it is impossible to exclude an eÂ¢ cient entry. Furthermore, if we allow two- part tariÂ¤ contracts, the entrant distributor can enter the market for any number of manufacturers.
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- Abito, Jose Miguel & Wright, Julian, 2008. "Exclusive dealing with imperfect downstream competition," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 227-246, January.
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- Chiara Fumagalli & Massimo Motta & Lars Persson, 2006. "Exclusive dealing, entry, and mergers," CSEF Working Papers 153, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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