|Klein, Joachim and Zenger, Hans (9. June 2009): Predatory Exclusive Dealing. Discussion Papers in Economics 2009-9|
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 (Discussion Paper)|
|Keywords:||exclusive dealing, predation|
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|
|Deposited On:||15. Jun 2009 06:30|
|Last Modified:||11. Feb 2015 21:44|
Abito, Jose Miguel and Julian Wright (2008). "Exclusive dealing with imperfect downstream competition", International Journal of Industrial Organization 26, 227-246.
Aghion, Philippe and Patrick Bolton (1987). "Contracts as a Barrier to Entry", American Economic Review 77, 388-401. Bernheim, B. Douglas and Michael D. Whinston (1998). "Exclusive Dealing", Journal of Political Economy 106, 64-103.
Bolton, Patrick and David S. Scharfstein (1990). "A Theory of Predation Based on Agency Problems in Financial Contracting", American Economic Review 80, 93-106.
Bork, Robert (1978). The Antitrust Paradox: A Policy At War With Itself, New York: Basic Books.
Carlton, Dennis W. and Michael Waldman (2002). "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries", RAND Journal of Economics 33, 194-220.
De Meza, David and Mariano Selvaggi (2009). "Exclusive Contracts Foster Relationship-Specific Investment", RAND Journal of Economics, forthcoming.
Edlin, Aaron (2002). "Stopping above-cost predatory pricing", Yale Law Journal 111, 941-991.
Elhauge, Einer (2003). "Why above-cost price cuts to drive out entrants are not predatory: and the implications for defining costs and market power", Yale Law Journal 112, 681-827.
Fumagalli, Chiara and Massimo Motta (2006). "Exclusive Dealing and Entry, when Buyers Compete", American Economic Review 96, 785-795.
Innes, Robert and Richard J. Sexton (1994). "Strategic Buyers and Exclusionary Contracts", American Economic Review 84, 566-584.
Krattenmaker, Thomas G. and Steven Salop (1986). "Anticompetitive Exclusion: Raising Rivals' Costs to Achieve Power Over Price", Yale Law Journal 96, 209-293.
Mankiw, N. Gregory and Michael D. Whinston (1986). "Free Entry and Social Inefficiency", RAND Journal of Economics 17, 48-58.
Marvel, Howard P. (1982). "Exclusive Dealing", Journal of Law and Economics 25, 1-25.
Mathewson, G. Frank and Ralph A. Winter (1987). "The Competitive Effects of Vertical Agreements: Comment", American Economic Review 77, 1057-1062.
O'Brien, Daniel P. and Greg Shaffer (1997). "Nonlinear Supply Contracts, Exclusive Dealing, and Equilibrium Market Foreclosure", Journal of Economics & Management Strategy 6, 755-785.
Ordover, Janusz and Greg Shaffer (2007). "Exclusionary Discounts", CCP Working Paper 07-13.
Rasmussen, Erik B., J. Mark Ramseyer and John S. Wiley, Jr. (1991). "Naked Exclusion", American Economic Review 81, 1137-1145.
Salop, Steven C. (2006). "Exclusionary Conduct, Effect on Consumers, and the Flawed Profit-Sacrifice Standard", Antitrust Law Journal 73, 311-374.
Segal, Ilya R. and Michael D. Whinston (2000a). "Exclusive Contracts and the Protection of Investments", RAND Journal of Economics 31, 603-633.
Segal, Ilya R. and Michael D. Whinston (2000b). "Naked Exclusion: Comment", American Economic Review 90, 296-309.
Simpson, John and Abraham L. Wickelgren (2007). "Naked Exclusion, Efficient Breach, and Downstream Competition", American Economic Review 97, 1305-1320.
Spector, David (2007). "Exclusive Contracts and Demand Foreclosure", Paris School of Economics Working Paper 2007-07.
Whinston, Michael D. (2006). Lectures on Antitrust Economics, Cambridge: MIT Press.