Vertical Practices Facilitating Exclusion∗

نویسندگان

  • John Asker
  • Heski Bar-Isaac
چکیده

Resale price maintenance (RPM), slotting fees, loyalty rebates and other related vertical practices can allow an incumbent manufacturer to transfer pro ts to retailers. If these retailers were to accommodate entry, upstream competition could lead to lower industry pro ts and the breakdown of these pro t transfers. Thus, in equilibrium, retailers can internalize the e ect of accommodating entry on the incumbent's pro ts. Consequently, if entry requires downstream accommodation, entry can be deterred. We discuss policy implications of this aspect of vertical contracting practices. JEL Codes: K21, L42, L12, D42 ∗This paper expands on an earlier working paper titled Exclusionary Minimum Resale Price Maintenance. We thank the organizers and participants of CCP Summer Conference 2010 for providing sessions prompting the ideas expressed in this paper. Speci c thanks to Rona Bar-Isaac, Simon Board, Joyee Deb, Malika Krishna, Robin Lee, Elliot Lipnowski, Hong Luo, Tom Overstreet, Larry White, Ralph Winter, and Sandy Yu for many helpful comments and to many seminar participants. The usual caveat applies. †Email: [email protected] ‡Email: [email protected]

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تاریخ انتشار 2012