Exclusive contracts when the incumbent can establish a direct retailer

Hiroshi Kitamura, Misato Sato, Koki Arai

Research output: Contribution to journalArticle

2 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)47-60
Number of pages14
JournalJournal of Economics/ Zeitschrift fur Nationalokonomie
Volume112
Issue number1
DOIs
Publication statusPublished - May 1 2014
Externally publishedYes

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Keywords

  • Direct retailers
  • Exclusive dealing
  • Two offers
  • Vertical relation

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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