Naked Exclusion Under Exclusive-Offer Competition

42 Pages Posted: 8 Mar 2018

See all articles by Hiroshi Kitamura

Hiroshi Kitamura

Kyoto Sangyo University

Noriaki Matsushima

Osaka University - Institute of Social and Economic Research (ISER)

Misato Sato

Kyoto Sangyo University

Date Written: March 2, 2018

Abstract

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 upstream firm is excluded unless it succeeds in exclusion. Consequently, the upper bound of exclusive offers becomes higher than when one of the upstream firms is a potential entrant that cannot make any exclusive offer. Thus, the exclusion of the existing upstream firm can be an equilibrium outcome even in the case where the potential entrant is never excluded.

Keywords: Antitrust policy, Exclusive dealing, Exclusive-offer competition, Imperfect competition

JEL Classification: L12, L41, L42

Suggested Citation

Kitamura, Hiroshi and Matsushima, Noriaki and Sato, Misato, Naked Exclusion Under Exclusive-Offer Competition (March 2, 2018). ISER Discussion Paper No. 1021. Available at SSRN: https://ssrn.com/abstract=3132893 or http://dx.doi.org/10.2139/ssrn.3132893

Hiroshi Kitamura

Kyoto Sangyo University ( email )

Motoyama, Kamigamo, Kita-Ku
Kyoto, Kyoto 603-8555
Japan

HOME PAGE: http://sites.google.com/view/hiroshikitamura/home

Noriaki Matsushima (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Misato Sato

Kyoto Sangyo University ( email )

Motoyama Kamigamo
Kyoto, Kyoto 603-8555
Japan

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