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http://hdl.handle.net/10419/53168
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| Title: | | Exclusive dealing: the interaction between foreclosure and investment promotion  |
| Authors: | | Fumagalli, Chiara Motta, Massimo Rønde, Thomas |
| Issue Date: | | 2009 |
| Series/Report no.: | | Nota di lavoro // Fondazione Eni Enrico Mattei: Institutions and markets 120.2009 |
| Abstract: | | This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the contract would not be signed and foreclosure would not be a concern. For this reason, considering potential foreclosure and investment promotion in isolation and then summing them up may not be a suitable approach to assess the net effect of ED. The paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defence for ED. |
| Subjects: | | Monopolization Practices Vertical Agreements |
| JEL: | | L12 L40 L42 |
| Document Type: | | Working Paper |
| Appears in Collections: | | FEEM Working Papers, Fondazione Eni Enrico Mattei
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