||Exclusive Contracts and Bargaining Power
Kitamura, Hiroshi ,
Sato, MisatoMatsushima, Noriaki
Institute of Social and Economic Research Discussion Papers
10 , 2016-09-08 , The Institute of Social and Economic Research, Osaka University
This study constructs a simplest model to examine anticompetitive exclusive contracts that prevent a downstream buyer from buying input from a new upstream supplier. Incorporating Nash bargaining into the standard one-buyer-one-supplier framework in the Chicago School critique, we show a possibility that an inefficient incumbent supplier can deter a socially efficient entry through exclusive contracts.