Technical Report Exclusive Contracts and Bargaining Power

Kitamura, Hiroshi  ,  Sato, Misato  ,  Matsushima, Noriaki

978pp.1 - 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.

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