We review the Chicago school's single monopoly profit theory whereby an upstream monopolist cannot increase its profits through vertical integration as it has sufficient market power anyways. In our model the dominant supplier has full bargaining power and uses observable two-part tariffs. We...

An incumbent supplier can use exclusive dealing contracts with buyers to prevent entry of an efficient rival when those contracts include an agreement over price. The linear price in the unique exclusionary equilibrium is above (below) the incumbent’s variable cost when buyers compete over...

We present a theory of anticompetitive exclusive dealing. In it, exclusive deals do not serve to disadvantage rivals or exclude them from the market. In equilibrium, it is often the case that multiple suppliers each form their own exclusive networks, with some downstream firms remaining...

We utilize a novel identification strategy to analyze the impact of assets in place on firms' decisions for future projects. We exploit the context in the pharmaceutical industry, where the loss of market exclusivity for a branded drug can be used to separate the impact of cash flows generated...

We consider exclusive contracts as a survival strategy for a local incumbent manufacturer facing a multinational manufacturer's entry. Although both manufacturers prefer to trade with an efficient local distributor, trading with inefficient competitive distributors is acceptable only to the...

We construct a two-period model of the supply chain's openness in a durable goods market by introducing two marketing modes: leasing and selling. Given a marketing mode, at the beginning of the first period, an incumbent supplier and the downstream monopolist choose one of the trading modes: (i)...

We review the Chicago school's single monopoly profit theory whereby an upstream monopolist cannot increase its profits through vertical integration as it has sufficient market power anyways. In our model the dominant supplier has full bargaining power and uses observable two-part tariffs. We...

We consider exclusive contracts as a survival strategy for a local incumbent manufacturer facing a multinational manufacturer’s entry. Although both manufacturers prefer to trade with an efficient local distributor, trading with inefficient competitive distributors is acceptable only to the...

We construct a two-period model of the supply chain's openness in a durable goods market by introducing two marketing modes: leasing and selling. Given a marketing mode, at the beginning of the first period, an incumbent supplier and the downstream monopolist choose one of the trading modes: (i)...

We develop a unified theory of exclusive dealing and exclusionary bundling. In a framework with two competing manufacturers which supply their product(s) through a monopolist retailer, we show that buyer power restores the profitability of such practices involving inefficient exclusion. The...

This paper investigates the contractual choice between exclusive dealing and common agency in a simple international oligopoly model where products are sold through intermediaries. We find that when trade barriers are high domestic firms tend to adopt exclusive dealing contracts, whereas trade...

Tied sales have a long history of scrutiny under the antitrust laws of the United States. The primary basis for the condemnation of this practice has been the court's belief in what has come to be known as the "leverage theory" of tying: that is, that tying provides a mechanism whereby a firm...

In this paper, we provide a conceptual framework for understanding the phenomenon of exclusive dealing, and we explore the motivations for and effects of its use. For a broad class of models, we characterize the outcome of a contracting game in which manufacturers may employ exclusive dealing...

A large proportion of our online activity takes place through a handful of platforms. With increased hostility towards the prevalence of vertical integration in tech markets and calls for the breaking up of profitable technology companies such as Amazon, Apple, Google and Microsoft, the time is...

We utilize a novel identification strategy to analyze the impact of assets in place on firms' decisions for future projects. We exploit the context in the pharmaceutical industry, where the loss of market exclusivity for a branded drug can be used to separate the impact of cash flows generated...

In this article we examine exclusionary coalitions: groups of suppliers and customers that work collectively to keep out rivals and share in the resulting benefits. We offer a typology of horizontal and vertical coalitions, which we connect to economic theories about how exclusion is...

Property rights have long been associated with a simple and distinctive technology: exclusion. But technologies can become outdated as conditions change, and exclusion is no exception. Recent decades have featured profound changes that have made exclusion a less useful, less necessary, and more...

This article studies incentives for a premium provider (Superstar) to offer exclusive contracts to competing platforms mediating the interactions between consumers and firms. When platform competition is intense, more consumers subscribe to the platform hosting the Superstar exclusively. This...

In this paper we examine exclusion accomplished by a coalition of firms--frequently, a coalition of suppliers and customers--that share the benefits of exclusion. As a particular historical example, we study the Canadian sugar industry of the 1880s, which was controlled by a complex coalition of...

In this paper we examine exclusion accomplished by a coalition of firms—frequently, a coalition of suppliers and customers—that share the benefits of exclusion. As a particular historical example, we study the Canadian sugar industry of the 1880s, which was controlled by a complex coalition...

This paper analyzes exclusionary conduct of platforms in two-sided markets. Motivated by recent antitrust cases against shopping centers introducing radius restrictions on their tenants, we provide a discussion of the likely positive and normative effects of exclusivity clauses, which prevent...

We develop a model of interlocking bilateral relationships between upstream firms (manufacturers)that produce differentiated goods and downstream firms (retailers) that compete imperfectly for consumers. Contract offers and acceptance decisions are private information to the contracting parties....

This study constructs a model of anticompetitive exclusive-offer competition between two existing upstream firms. Under exclusive-offer competition, the upstream firm's profit depends on the rival's exclusive offer. If the rival makes an exclusive offer acceptable for the downstream firm, the...

This study constructs a model of anticompetitive exclusive-offer competition between two existing upstream firms. Under exclusive-offer competition, the upstream firm's profit depends on the rival’s exclusive offer. If the rival makes an exclusive offer acceptable for the downstream firm, the...

This study constructs a model of anticompetitive exclusive-offer competition between two existing upstream firms. Under exclusive-offer competition, the upstream firm's profit depends on the rival's exclusive offer. If the rival makes an exclusive offer acceptable for the downstream firm, the...

This paper presents an experimental study of exclusive dealing with an active entrant seller. We compare three treatments, which differ in terms of the sellers' moves, and find significant differences to the incumbent seller's exclusive offer and exclusion rates. Compared to the case where the...

In a setting where retailers and suppliers compete for each other by offering binding contracts, exclusivity clauses serve as a competitive device. As a result of these clauses, firms addressed by contracts only accept the most favorable deal. Thus the contract-issuing parties have to squeeze...

We provide an explanation for a frequently observed vertical restraint in ecommerce, namely that brand manufacturers partially or completely prohibit that retailers distribute their high-quality products over the internet. Our analysis is based on the assumption that a consumer's purchasing...

This study constructs a model of anticompetitive exclusive contracts in the presence of complementary inputs. A downstream firm transforms multiple complementary inputs into final products. When complementary input suppliers have market power, upstream competition within a given input market...

This study constructs a model of anticompetitive exclusive contracts in the presence of complementary inputs. A downstream firm transforms multiple complementary inputs into final products. When complementary input suppliers have market power, upstream competition within a given input market...

We provide an explanation for a frequently observed vertical restraint in ecommerce, namely that brand manufacturers partially or completely prohibit that retailers distribute their high-quality products over the internet. Our analysis is based on the assumption that a consumer's purchasing...