Exclusive Contracts under Financial Constraints

Kitamura Hiroshi ()
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Kitamura Hiroshi: Sapporo Gakuin University

The B.E. Journal of Economic Analysis & Policy, 2011, vol. 11, issue 1, 31

Abstract: This paper constructs a model of anticompetitive exclusive dealing in the presence of financial constraints. Because of the presence of these constraints, the incumbent cannot remain in business if a deviant buyer appears. We argue that the existence of financial constraints eliminates the buyer's profit in deviating from exclusive contracts. As a result, when compared with previous studies, the possibility of exclusion increases. That is, exclusion arises, even when buyers compete less intensively.

Keywords: vertical relation; exclusive contracts; financial constraints (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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DOI: 10.2202/1935-1682.2677

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