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Exclusivity Clauses: Enhancing Competition, Raising Prices

Marc Blatter and Silvio Sticher

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: In a setting where retailers and suppliers compete for each other by offering binding contracts, exclusivity clauses serve as a competitive device. As a result of these clauses, firms addressed by contracts only accept the most favorable deal. Thus the contract-issuing parties have to squeeze their final customers and transfer the surplus within the vertical supply chain. We elaborate to what extent the resulting allocation depends on the sequence of play and discuss the implications of a ban on exclusivity clauses.

Keywords: exclusive dealing; exclusive provision (search for similar items in EconPapers)
JEL-codes: D86 L13 L42 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-com and nep-ind
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