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Naked exclusion in the lab: The case of sequential contracting

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Abstract

In the context of the naked exclusion model of Rasmusen, Ramseyer and Wiley (1991) and Segal and Whinston (2000b), we examine whether sequential contracting is more conducive to exclusion in the lab, and whether it leads to lower exclusion costs for the incumbent, than simultaneous contracting. We find that an incumbent who proposes exclusive contracts to buyers sequentially, is better able to deter entry than an incumbent who proposes contracts simultaneously. In contrast to theory, this comes at a substantial cost for the incumbent.

Suggested Citation

  • Jan Boone & Wieland Müller & Sigrid Suetens, 2011. "Naked exclusion in the lab: The case of sequential contracting," Vienna Economics Papers vie1109, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie1109
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    Cited by:

    1. Cason, Timothy N. & Mui, Vai-Lam, 2015. "Rich communication, social motivations, and coordinated resistance against divide-and-conquer: A laboratory investigation," European Journal of Political Economy, Elsevier, vol. 37(C), pages 146-159.
    2. Heijmans, Roweno J.R.K. & Suetens, Sigrid, 2025. "Comparing Subsidies to Solve Coordination Failure," Discussion Papers 2025/9, Norwegian School of Economics, Department of Business and Management Science.
    3. Zhijun Chen & Greg Shaffer, 2014. "Naked exclusion with minimum-share requirements," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 64-91, March.
    4. Chen, Ying & Zápal, Jan, 2024. "Naked exclusion with heterogeneous buyers," International Journal of Industrial Organization, Elsevier, vol. 95(C).
    5. Moellers, Claudia & Normann, Hans-Theo & Snyder, Christopher M., 2017. "Communication in vertical markets: Experimental evidence," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 214-258.
    6. Miguel A. Fonseca & Yan Li & Hans‐Theo Normann, 2018. "Why factors facilitating collusion may not predict cartel occurrence — experimental evidence," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 255-275, July.
    7. Normann, Hans-Theo & Möllers, Claudia & Snyder, Christopher M., 2015. "Communication in Vertically Related Markets: Experimental Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112842, Verein für Socialpolitik / German Economic Association.
    8. Eguia, Jon X. & Llorente-Saguer, Aniol & Morton, Rebecca & Nicolò, Antonio, 2018. "Equilibrium selection in sequential games with imperfect information," Games and Economic Behavior, Elsevier, vol. 109(C), pages 465-483.
    9. Christoph March & Robert K. von Weizsäcker & Robert K. von Weizsäcker, 2016. "Coordinating Intergenerational Redistribution and the Repayment of Public Debt," CESifo Working Paper Series 6075, CESifo.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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