The Competitive Effects of Quantity Discounts
12 Pages Posted: 10 Sep 2010
Date Written: 2007
From the very earliest antitrust cases to the present, courts have struggled with a fundamental conflict involving contracts between buyers and sellers of intermediate goods. Namely, on the one hand, contractual arrangements binding a buyer to a particular seller frequently are necessary to support efficient exchange and, therefore, are an integral component of a well-functioning market system. But on the other hand, such contracts plausibly can have exclusionary effects, foreclosing potential entrants' access to essential inputs and/or buyers for the duration of the contract.
Keywords: Quantity Discounts, Contracts, Communications, Regulation
JEL Classification: L5
Suggested Citation: Suggested Citation