Quota Leasing as a Competitive Strategy: A Story of Chicken Feed, Laying Hens, and Eggs

Abraham Hollander

Canadian Journal of Economics, 1990, vol. 23, issue 3, 617-29

Abstract: This paper investigates why, under supply control by a marketing board, production quota originally given to downstream producers may ultimately end up in the hands of the latters' upstream suppliers who will lease them back to their original owners. A link between the extent of leasing and the price of quota is established. Finally, a rationale is provided explaining why such leasing contracts contain tying and exclusivity clauses.

Date: 1990
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