Exclusive contracts when the incumbent can establish a direct retailer

Hiroshi Kitamura (), Misato Sato () and Koki Arai

Journal of Economics, 2014, vol. 112, issue 1, 47-60

Abstract: This paper constructs a model of anticompetitive exclusive dealings with potential downstream competition. Unlike in previous studies, the incumbent can establish a direct retailer with some fixed payment and can offer an exclusive contract to a downstream buyer twice. We show that the existence of these two options helps the incumbent deter socially efficient entry and earn almost monopoly profits even in the absence of scale economies and downstream competition. Copyright Springer-Verlag Wien 2014

Keywords: Direct retailers; Exclusive dealing; Two offers; Vertical relation; L12; L41; L42 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:112:y:2014:i:1:p:47-60

DOI: 10.1007/s00712-013-0335-7

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