Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129575
Authors: 
Nocke, Volker
Rey, Patrick
Year of Publication: 
2014
Series/Report no.: 
Working Paper Series, Department of Economics, University of Mannheim 14-22
Abstract: 
We develop a model of interlocking bilateral relationships between upstream firms (manufacturers)that produce differentiated goods and downstream firms (retailers) that compete imperfectly for consumers. Contract offers and acceptance decisions are private information to the contracting parties. We show that both exclusive dealing and vertical integration between a manufacturer and a retailer lead to vertical foreclosure, to the detriment of consumers and society. Finally, we show that firms have indeed an incentive to sign such contracts or to integrate vertically.
Subjects: 
vertical relations
exclusive dealing
vertical merger
foreclosure
bilateral contracting
JEL: 
L13
L42
D43
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
528.32 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.