Predatory Exclusive Dealing

Klein, Joachim and Zenger, Hans (9. June 2009): Predatory Exclusive Dealing. Discussion Papers in Economics 2009-9

Abstract

While the previous literature on exclusive dealing has been concerned with the question of how exclusive dealing can raise static profits, this paper analyzes the question of how exclusive dealing can be used to predate in a dynamic context. It is shown that exclusive dealing may arise even if it reduces static profits. Exclusivity provisions may not only allow excluding efficient competitors, but indeed are often a cheaper exclusionary tool than predatory pricing. This is the case if the prey's access to finance is not too limited. Furthermore, it is more likely that exclusive dealing is preferable compared to predatory pricing the more market power the predator has with respect to the prey.

• Item Type: Paper
• Form of publication: Submitted Version
• Keywords: exclusive dealing, predation
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Industrial Organization
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: K21, L11, L12, L41, L42
• Language: English

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