The Dampening-of-Competition Effect of Exclusive Dealing

Y. Lin

Journal of Industrial Economics, 1990, vol. 39, issue 2, 209-23

Abstract: Using the dampening-of-competition approach to understanding vertical relationships, this paper shows that, in the absence of intrabrand retailer competition, firms earn greater profits using exclusive dealing. The paper explains the frequent simultaneous appearance of exclusive dealing and exclusive territoriality. The results are used to analyze the famous 1949 Standard Stations case. The author concludes that the 1949 Court did the right thing for a wrong reason. Copyright 1990 by Blackwell Publishing Ltd.

Date: 1990
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