How Does Downstream Firms' Efficiency Affect Exclusive Supply Agreements?
This study constructs a model for examining anticompetitive exclusive supply contracts that prevent an upstream supplier from selling input to a new downstream firm. With regard to the technology to transform the input produced by the supplier, as an entrant becomes increasingly efficient, its input demand can decrease, and thus, the supplier earns smaller profits when socially efficient entry is allowed. Hence, the inefficient incumbent can deter socially efficient entry via exclusive supply contracts, even in the framework of the Chicago School argument where a single seller, a single buyer, and a single entrant exist.
Year of publication: |
2013-08
|
---|---|
Authors: | Kitamura, Hiroshi ; Matsushima, Noriaki ; Sato, Misato |
Institutions: | Institute of Social and Economic Research (ISER), Osaka University |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Exclusive Contracts with Complementary Inputs
Kitamura, Hiroshi, (2015)
-
Exclusive contracts with complementary inputs
Kitamura, Hiroshi, (2015)
-
How does downstream firms' efficiency affect exclusive supply agreements?
Kitamura, Hiroshi, (2013)
- More ...