Abstract

http://ssrn.com/abstract=2069860
 


 



On the Welfare Effects of Exclusive Distribution Arrangements


Jürgen Eichberger


University of Heidelberg - Alfred Weber Institute for Economics

Frank Mueller-Langer


Max Planck Institute for Innovation and Competition; Munich Center for Innovation and Entrepreneurship Research (MCIER); International Max Planck Research School for Competition and Innovation (IMPRS-CI)

May 24, 2012

Max Planck Institute for Intellectual Property & Competition Law Research Paper No. 12-07

Abstract:     
The regulation of vertical relationships between firms is the subject of persistent legal and academic controversy. The literature studying vertical trade relationships seems to assume that an upstream monopolist prefers downstream competition over exclusive distribution arrangements. We derive precise conditions for when an upstream monopolist prefers competing distribution systems over exclusive distribution in the downstream market. We also show that the welfare effects of downstream competition are ambiguous. A downstream oligopoly may have negative welfare properties compared to a downstream monopoly.

Number of Pages in PDF File: 14

Keywords: Exclusive distribution, Competing distribution, Vertical foreclosure, Cournot competition

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Date posted: June 26, 2012  

Suggested Citation

Eichberger, Jürgen and Mueller-Langer, Frank, On the Welfare Effects of Exclusive Distribution Arrangements (May 24, 2012). Max Planck Institute for Intellectual Property & Competition Law Research Paper No. 12-07. Available at SSRN: http://ssrn.com/abstract=2069860 or http://dx.doi.org/10.2139/ssrn.2069860

Contact Information

Jürgen Eichberger
University of Heidelberg - Alfred Weber Institute for Economics ( email )
Heidelberg, D-69117
Germany
Frank Mueller-Langer (Contact Author)
Max Planck Institute for Innovation and Competition ( email )
Marstallplatz 1
Munich, 80539
Germany
HOME PAGE: http://www.ip.mpg.de/en/pub/academic_body/acad_staff/frank_mueller-langer.cfm

Munich Center for Innovation and Entrepreneurship Research (MCIER) ( email )
Germany
HOME PAGE: http://www.ip.mpg.de/en/pub/mcier.cfm
International Max Planck Research School for Competition and Innovation (IMPRS-CI) ( email )
Germany
HOME PAGE: http://www.imprs-ci.ip.mpg.de/en/pub/news.cfm?varnews=47356
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