Vertical foreclosure and multi-segment competition
Bruno Jullien (),
Markus Reisinger and
Patrick Rey ()
Economics Letters, 2018, vol. 169, issue C, 31-34
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 L12 L42 K21 (search for similar items in EconPapers)
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Working Paper: Vertical Foreclosure and Multi-Segment Competition (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:169:y:2018:i:c:p:31-34
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