This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. Since ED promotes the incumbent seller's investment, the seller and the buyer realize a greater surplus from bilateral trade under exclusivity. Hence, the parties involved may sign an ED contract thta excludes a more efficient entrant in circumstances where ED would not arise absent investment. The paper therefore invites a more cautious attitude towards appective possible investment promotion arguments as a defence for ED.
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Titolo: | Exclusive dealing: investment promotion may facilitate inefficient foreclosure | |
Data di pubblicazione: | 2012 | |
Autori: | ||
Autori: | Fumagalli, Chiara; M., Motta; T., Roende | |
Rivista: | JOURNAL OF INDUSTRIAL ECONOMICS | |
Abstract: | This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. Since ED promotes the incumbent seller's investment, the seller and the buyer realize a greater surplus from bilateral trade under exclusivity. Hence, the parties involved may sign an ED contract thta excludes a more efficient entrant in circumstances where ED would not arise absent investment. The paper therefore invites a more cautious attitude towards appective possible investment promotion arguments as a defence for ED. | |
Appare nelle tipologie: | 01 - Article in academic journal / Articolo su rivista scientifica |