The Dampening-of-Competition Effect of Exclusive Dealing

Lin, Yan

doi:10.2307/2098494

Cited by 61 publications

(42 citation statements)

References 7 publications

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“…In effect, the dominant firm exploits its first-mover advantage to soften the downstream competition between retailers 1 and 2. This dampening-of-competition is derived in similar contexts by Bonanno and Vickers (1988), Lin (1990), Shaffer (1991), and others.…”

Section: Offering Slotting Allowances To Exclude Competitorssupporting

confidence: 61%

Slotting Allowances and Optimal Product Variety

Shaffer

2005

The B.E. Journal of Economic Analysis &Amp; Policy

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Some commentators believe that slotting allowances enhance social welfare by providing retailers with an efficient way to allocate scarce retail shelf space. The claim is that, by offering their shelf space to the highest bidders, retailers act as agents for consumers and ensure that only the most socially desirable products obtain distribution. I show that this claim does not hold in a model in which a dominant firm and competitive fringe compete for retailer patronage. By using slotting allowances to bid up the price of shelf space, the dominant firm can sometimes exclude the competitive fringe even when welfare would be higher if the fringe obtained distribution.

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Section: Offering Slotting Allowances To Exclude Competitorssupporting

confidence: 61%

Slotting Allowances and Optimal Product Variety

Shaffer

2005

The B.E. Journal of Economic Analysis &Amp; Policy

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“…Salinger (1988) shows that, with Þnal good Cournot competition, a vertically integrated Þrm prefers not to supply to an second downstream Þrm. Furthermore, Lin (1990) shows that, in the absence of intra-brand competition, exclusive dealing is chosen by Þrms in equilibrium for both linear and two-part tariff pricing contracts.…”

Section: Introductionmentioning

confidence: 99%

Coexistence of strategic vertical separation and integration

Jansen

2003

International Journal of Industrial Organization

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This paper gives conditions under which vertical separation is chosen by some upstream firms, while vertical integration is chosen by others in the equilibrium of a symmetric model. A vertically separating firm trades off fixed contracting costs against the strategic benefit of writing a (two-part tariff, exclusive dealership) contract with its retailer. Equilibrium coexistence emerges when observable and non-renegotiable contracts are offered to downstream Cournot oligopolists that supply close substitutes. The scope for equilibrium coexistence diminishes when assumptions on contract observability and commitment are relaxed. JEL Codes. L22, L42 Keywords: vertical oligopoly, contract costs, strategic substitutes ZUSAMMENFASSUNG Koexistenz von strategischer vertikaler Trennung und IntegrationIn der Arbeit werden die Bedingungen identifiziert, unter denen im Gleichgewicht eines symmetrischen Modells einige, in der Produktionskette vorgelagerte Firmen vertikale Trennung wählen, während andere sich für vertikale Integration entscheiden. Ein vertikal getrenntes Unternehmen wägt die fixen Vertragskosten gegen den strategischen Vorteil eines Vertrages (mit gespaltenem Tarif und exklusiven Vertriebsrechten) mit dem nachgelagerten Einzelhändler ab. Die Koexistenz der beiden Organisationsformen im Gleichgewicht entsteht, wenn den nachgelagerten Cournot-Oligopolisten, die fast perfekte Substitute produzieren, beobachtbare und nicht nachverhandelbare Verträge angeboten werden. Die Koexistenz der Organisationsformen im Gleichgewicht tritt weniger häufig auf, wenn die Annahmen bezüglich der Beobachtbarkeit der Verträge und der Möglichkeit sich zu binden, gelockert werden. *

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“…They could compete at a supermarket for sales on a daily basis, or they could compete once a year for exclusive shelf space. Which arrangement benefits consumers most remains inconclusive, as the debates among Lin (1990), O'Brien and Shaffer (1993), Farrell (2005), and Klein and Murphy (2008) illustrate. Int'l.…”

Section: Efficiency Reasons For Exclusion Contractsmentioning

confidence: 99%

Exclusive Dealing: Before, Bork, and Beyond

Ramseyer

Rasmusen

2014

The Journal of Law and Economics

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Abstract:Antitrust scholars have come to accept the basic ideas about exclusive dealing that Bork articulated in The Antitrust Paradox. Indeed, they have even extended his list of reasons why exclusive dealing can promote economic efficiency. Yet they have also taken up his challenge to explain how exclusive dealing could possibly cause harm, and have modelled a variety of special cases where it does. Some (albeit not all) of these are sufficiently plausible to be useful to prosecutors and judges.

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The Dampening-of-Competition Effect of Exclusive Dealing

Cited by 61 publications

References 7 publications

Slotting Allowances and Optimal Product Variety

Slotting Allowances and Optimal Product Variety

Coexistence of strategic vertical separation and integration

Exclusive Dealing: Before, Bork, and Beyond

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