Paying not to sell

Emanuele Bacchiega, Olivier Bonroy and Rania Mabrouk
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Rania Mabrouk: GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique

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Abstract: In this paper the authors show that, in the presence of buyer and seller power, a monopolist can enter into a costly contractual relationship with a low-quality supplier with the sole intention of improving its bargaining position relative to a high-quality supplier, without ever selling the good produced by that firm.

Keywords: MONOPOLY; VERTICAL; PRODUCT; DIFFERENTIATION; VERTICAL; RELATIONSHIP (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

Published in Economics Letters, 2013, 121 (1), pp.137-140. ⟨10.1016/j.econlet.2013.07.018⟩

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Journal Article: Paying not to sell (2013)
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Working Paper: Paying not to sell (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01064094

DOI: 10.1016/j.econlet.2013.07.018

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