We propose a new theory of exclusive dealing. The theory is based on the assumption that a dominant firm has a competitive advantage over its rivals, and that the buyers' willingness to pay for the product is private information. In this setting, the dominant firm can impose contractual restrictions on buyers without necessarily compensating them, implying that exclusive dealing contracts can be both profitable and anticompetitive. We discuss the general implications of the theory for competition policy and illustrate by examples its applicability to antitrust cases.

Calzolari, G., Denicolò, V. (2015). Exclusive contracts and market dominance. THE AMERICAN ECONOMIC REVIEW, 105(11), 3321-3351 [10.1257/aer.20131664].

Exclusive contracts and market dominance

CALZOLARI, GIACOMO;DENICOLO', VINCENZO
2015

Abstract

We propose a new theory of exclusive dealing. The theory is based on the assumption that a dominant firm has a competitive advantage over its rivals, and that the buyers' willingness to pay for the product is private information. In this setting, the dominant firm can impose contractual restrictions on buyers without necessarily compensating them, implying that exclusive dealing contracts can be both profitable and anticompetitive. We discuss the general implications of the theory for competition policy and illustrate by examples its applicability to antitrust cases.
2015
Calzolari, G., Denicolò, V. (2015). Exclusive contracts and market dominance. THE AMERICAN ECONOMIC REVIEW, 105(11), 3321-3351 [10.1257/aer.20131664].
Calzolari, Giacomo; Denicolò, Vincenzo
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/524590
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