Exclusive Dealing and the Market Power of Buyers

Oki Ryoko and Yanagawa Noriyuki
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Oki Ryoko: Graduate School of Economics, University of Tokyo
Yanagawa Noriyuki: University of Tokyo

Asian Journal of Law and Economics, 2011, vol. 2, issue 1, 25

Abstract: This paper examines the effects of exclusive dealing contracts offered by an incumbent distributor. The traditional literature has focused solely on exclusive dealing contracts offered by incumbent manufacturers, which derive multiple equilibria within homogeneous price competition models. In contrast, exclusive dealing contracts offered by distributors generate unique equilibrium, wherein an efficient entrant can be excluded as long as distributors have sufficient bargaining power. We also introduce an entrant in the manufacturing side, and show that the upstream entry may promote exclusion of the efficient entry by an exclusive dealing contract.

Keywords: exclusive dealing; large distributor; antitrust policy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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DOI: 10.2202/2154-4611.1016

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