Vertical foreclosure and multi-segment competition

Bruno Jullien, Markus Reisinger and Patrick Rey

Economics Letters, 2018, vol. 169, issue C, 31-34

Abstract: This paper analyzes a supplier’s incentives to foreclose downstream entry when entrants have stronger positions in different market segments, thus bringing added value as well as competition. We first consider the case where wholesale contracts take the form of linear tariffs, and characterize the conditions under which the competition-intensifying effect dominates, thereby leading to foreclosure. We then show that foreclosure can still occur with non-linear tariffs, even coupled with additional provisions such as resale price maintenance.

Keywords: Foreclosure; Vertical contracting; Customer segments; Downstream competition (search for similar items in EconPapers)
JEL-codes: D43 K21 L12 L42 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176518301587
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Vertical foreclosure and multi-segment competition (2018)
Working Paper: Vertical Foreclosure and Multi-Segment Competition (2017)
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:eee:ecolet:v:169:y:2018:i:c:p:31-34

DOI: 10.1016/j.econlet.2018.04.023

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().