Naked exclusion with minimum-share requirements

A-Tier
Journal: RAND Journal of Economics
Year: 2014
Volume: 45
Issue: 1
Pages: 64-91

Authors (2)

Zhijun Chen (Monash University) Greg Shaffer (not in RePEc)

Score contribution per author:

2.018 = (α=2.02 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

type="main"> <p>We consider a class of contracts in which buyers commit to giving a seller some minimum share of their total purchases. We show that such contracts can be used by an incumbent seller to reduce the probability of entry by a rival seller when the incumbent can commit to its selling price as part of the contract. We further show that such contracts can be profitable for the incumbent even when exclusive dealing would not be, and even when buyers can coordinate their accept-or-reject decisions. The average price paid by the buyers will be higher and welfare will be lower whether or not the incumbent's exclusionary conduct turns out to be successful in preventing entry.

Technical Details

RePEc Handle
repec:bla:randje:v:45:y:2014:i:1:p:64-91
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-25