Vertical Practices Facilitating Exclusion∗
نویسندگان
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]
منابع مشابه
Online Appendix (Not for Publication): Extensions to “Vertical Practices Facilitating Exclusion”
In this appendix, we begin by providing formal treatments of three instances in which the state-space/MPNE assumption is relaxed: first, when the entrant can play the same exclusionary tactic as the incumbent post-entry; second, when the manufacturer can collude post-entry; and, third, we consider an example of a retailer cartel being present. Following these extensions of our analysis, we revi...
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