Exclusive dealing: the interaction between foreclosure and investment promotion

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 120.2009

Classification and Topics

• Classification: Wirtschaft ; Monopoly; Monopolization Strategies ; Antitrust Issues and Policies: General ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts
• Subject: Monopolization Practices ; Vertical Agreements

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fumagalli, Chiara ; Motta, Massimo ; Rønde, Thomas
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/53168
• Last update: 10.03.2025, 11:42 AM CET