Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/234927
Authors: 
Kitamura, Hiroshi
Matsushima, Noriaki
Sato, Misato
Year of Publication: 
2021
Series/Report no.: 
ISER Discussion Paper No. 1115
Abstract: 
We explore the supply chain problem of a downstream durable goods monopolist, who chooses one of the following trading modes: an exclusive supply chain with an incumbent supplier or an open supply chain, allowing the monopolist to trade with a new efficient entrant in the future. The predicted retail price reduction in the future dampens the profitability of the original firms. An efficient entrant's entry magnifies such a price reduction, causing a further reduction of original firms' joint profits. In equilibrium, the downstream monopolist chooses the exclusive supply chain to escape further price reductions, although it anticipates efficient entry.
Subjects: 
Antitrust policy
Durable goods
Exclusive supply chain
Vertical relation
JEL: 
L12
L41
L42
Document Type: 
Working Paper

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