Exclusionary Practices in Two-Sided Markets: The Effect of Radius Clauses on Competition between Shopping Centers

Georg Götz and Tim Brühn

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes exclusionary conduct of platforms in two-sided markets. Motivated by recent antitrust cases against shopping centers introducing radius restrictions on their tenants, we provide a discussion of the likely positive and normative effects of exclusivity clauses, which prevent tenants from opening outlets in other shopping centers covered by the clause. In a standard two-sided market model, we analyze the incentives of an incumbent shopping center to introduce exclusivity clauses when faced by entry of a rival shopping center. We show that exclusivity agreements are especially profitable and detrimental to social welfare if competition is intense between the two shopping centers. We argue that the focus of courts on market definition is misplaced in markets determined by competitive bottlenecks.

JEL-codes: D43 D62 L13 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com and nep-mic
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https://www.econstor.eu/bitstream/10419/145627/1/VfS_2016_pid_6537.pdf (application/pdf)

Related works:
Working Paper: Exclusionary Practices in Two-Sided Markets: The Effect of Radius Clauses on Competition Between Shopping Centers (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145627

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