Exclusivity Restrictions in Markets with Adverse Selection: The Case of Extended Warranties

Aidan Hollis

Working Papers from University of Toronto, Department of Economics

Abstract: This paper investigates whether the contractual exclusion of third-party extended warranties should be legally permissible, using a model incorporating consumer heterogeneity. The welfare effects of competition in the market for extended warranties are shown to depend on the degree of competition in the product market. In contrast to the approach typically adopted by the courts, the paper argues that manufacturers should not generally be permitted to practice requirements contracting in extended warranties, even when the product market is competitive.

JEL-codes: L12 L4 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1996-01-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-ECPAP-96-03.ps MainText (application/postscript)
https://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-ECPAP-96-03.pdf MainText (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:ecpap-96-03

Access Statistics for this paper

More papers in Working Papers from University of Toronto, Department of Economics 150 St. George Street, Toronto, Ontario.
Bibliographic data for series maintained by RePEc Maintainer ().