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Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
The Use of Exclusive Contracts to Deter Entry

The Use of Exclusive Contracts to Deter Entry

Paperback

Business General

ISBN10: 1502752204
ISBN13: 9781502752208
Publisher: Createspace
Published: Oct 8 2014
Pages: 26
Weight: 0.19
Height: 0.05 Width: 8.50 Depth: 11.00
Language: English
This book shows that an upstream monopolist that sells to competing downstream firms can profitably use exclusive contracts to deter entry even where scale economies are absent. By offering downstream firms a discount if they sign an exclusive contract covering later periods, the incumbent monopolist can often place each downstream firm in a prisoner's dilemma. Because a downstream firm that refuses to sign the exclusive contract loses profit to downstream firms that sign the exclusive contract, downstream firms will sign exclusive contracts even when, over the long-term, they would obtain the upstream good at a lower price if they all refused to sign.

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Business General