Exclusive Dealing and Vertical Integration in Interlocking Relationships

Volker Nocke and Patrick Rey

No 14-515, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We develop a model of interlocking bilateral relationships between upstream manufacturers that produce differentiated goods and downstream retailers that compete imperfectly for consumers. Contract offers and acceptance decisions are private information to the contracting parties. We show that both exclusive dealing and vertical integration between a manufacturer and a retailer lead to vertical foreclosure, at the detriment of consumers and society. Finally, we show that firms have indeed an incentive to sign such contracts or to integrate vertically.

Keywords: vertical relations; exclusive dealing; vertical merger; foreclosure; bilateral contracting (search for similar items in EconPapers)
JEL-codes: D43 L13 L42 (search for similar items in EconPapers)
Date: 2014-07, Revised 2018-06
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Related works:
Journal Article: Exclusive dealing and vertical integration in interlocking relationships (2018)
Working Paper: Exclusive dealing and vertical integration in interlocking relationships (2018)
Working Paper: Exclusive Dealing and Vertical Integration in Interlocking Relationships (2014)
Working Paper: Exclusive Dealing and Vertical Integration in Interlocking Relationships (2014)
Working Paper: Exclusive dealing and vertical integration in interlocking relationships (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:28372

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