publication . Preprint . 2008

Exclusive Dealing and Entry

João Leão;
Open Access
  • Published: 15 Jun 2008
Abstract
This paper examines the use of exclusive dealing agreements to prevent the entry of rival firms. An exclusive dealing agreement is a contract between a buyer and a seller where the buyer commits to buy a good exclusively from the seller. One main concern of the literature is to explain how an incumbent seller is able to persuade the buyers to sign an exclusive dealing agreement that deters the entry of a more efficient rival seller. We propose a new explanation when the buyers are downstream firms and both the seller and the buyers face the threat of entry. In this case, the entry of more efficient upstream seller, by decreasing the market power of the upstream ...
Subjects
ACM Computing Classification System: ComputingMilieux_COMPUTERSANDSOCIETYComputerApplications_COMPUTERSINOTHERSYSTEMSTheoryofComputation_GENERALComputingMilieux_THECOMPUTINGPROFESSION
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