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 language | English |
|---|---|
| Pages (from-to) | 47-60 |
| Number of pages | 14 |
| Journal | Journal of Economics/ Zeitschrift fur Nationalokonomie |
| Volume | 112 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - May 1 2014 |
| Externally published | Yes |
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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Cite this
Kitamura, H., Sato, M., & Arai, K. (2014). Exclusive contracts when the incumbent can establish a direct retailer. Journal of Economics/ Zeitschrift fur Nationalokonomie, 112(1), 47-60. https://doi.org/10.1007/s00712-013-0335-7