On the Dampening-of-Competition Effect of Exclusive Dealing

Daniel P O'Brien and Greg Shaffer

Journal of Industrial Economics, 1993, vol. 41, issue 2, 215-21

Abstract: The authors compare and contrast the profit and welfare effects of exclusive dealing, sales through a common retailer, and vertical integration. As did Y. J. Lin (1990), the authors find that imperfectly competitive manufacturers prefer to impose exclusive dealing on their retailers. Unlike Lin, the authors find that welfare is higher under exclusive dealing than when products are sold through a common retailer. This finding suggests a new interpretation of the Standard Stations v. United States 1949 antitrust case. Copyright 1993 by Blackwell Publishing Ltd.

Date: 1993
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