In:
Review of Industrial Organization, Springer Science and Business Media LLC, Vol. 64, No. 2 ( 2024-03), p. 219-242
Abstract:
We develop a bilateral monopoly model with a downstream entrant to examine anticompetitive exclusive supply contracts that prevent the upstream supplier from selling inputs to the downstream entrant. When the entrant is more efficient and needs a lesser amount of the input that is produced by the supplier than does the incumbent, the input demand may not increase significantly following the entry. Therefore, the socially efficient entry does not increase the supplier’s profits significantly, which allows the downstream incumbent to deter socially efficient entry through an exclusive supply contract. This result holds even in the simplest framework, which is composed of a single seller, buyer, and entrant.
Type of Medium:
Online Resource
ISSN:
0889-938X
,
1573-7160
DOI:
10.1007/s11151-023-09932-y
Language:
English
Publisher:
Springer Science and Business Media LLC
Publication Date:
2024
detail.hit.zdb_id:
638140-6
detail.hit.zdb_id:
1478923-1
SSG:
3,2
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