Exclusive contracts and demand foreclosure

David Spector

PSE Working Papers from HAL

Abstract: A firm may decide to have some of its customers sign exclusive contracts in order to deprive a rival of the minimum viable size, exclude it from the market, and enjoy increased market power. If contracts are required to be simple enough, this strategy may induce inefficient exclusion even if the excluded firm is present at the contracting stage. Exclusive contracts may thus cause inefficient eviction, not only entry-deterrence, even though the former is less likely than the latter. However, complex enough contracts, if feasible, would allow agents to reach a Pareto-optimum, without inefficient exclusion.

Keywords: exclusive dealing; foreclosure; exclusionary strategies (search for similar items in EconPapers)
Date: 2007-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00588311v1
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Exclusive contracts and demand foreclosure (2011)
Working Paper: Exclusive contracts and demand foreclosure (2011)
Working Paper: Exclusive contracts and demand foreclosure (2011)
Working Paper: Exclusive contracts and demand foreclosure (2007)
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