This paper considers a potential entrant that cannot enter without paying an avoidable cost and cannot commit toi that until after incumbent firms have committed to their output.

Exploring a variant of the model of Aghion and Bolton Yields the following results. When an incumbent seller is constrained to price linearly, an exclusionary vertical contract Pareto-dominates spot sales by smoothing prices across states of the world ( potential entrant does or does not appear).

We prove the existence of stationary equilibrium in the primary and secondhand markets for an indivisible consumer durable in a general model with stochastic degradation and endogenous scrappage decisions.