Arbeitspapier

Contracts as a barrier to entry in markets with non-pivotal buyers

Considering markets with non-pivotal buyers we analyze the anti-competitive effects of breakup fees used by an incumbent facing a more efficient entrant in the future. Buyers differ in their intrinsic switching costs. Breakup fees are profitably used to foreclose entry, regardless of the entrant's efficiency advantage or level of switching costs. Banning breakup fees is beneficial to consumers and enhances the total welfare unless the entrant's efficiency is close to the incumbent's. Inefficient foreclosure arises not because of rent shifting from the entrant, but because the incumbent uses the long-term contract to manipulate consumers' expected surplus from not signing it.

Sprache
Englisch

Erschienen in
Series: ESMT Working Paper ; No. 15-02 (R1)

Klassifikation
Management
Thema
Wechselverhalten
Zahlungsbereitschaftsanalyse
Theorie

Ereignis
Geistige Schöpfung
(wer)
Bedre-Defolie, Özlem
Biglaiser, Gary
Ereignis
Veröffentlichung
(wer)
European School of Management and Technology (ESMT)
(wo)
Berlin
(wann)
2016

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Bedre-Defolie, Özlem
  • Biglaiser, Gary
  • European School of Management and Technology (ESMT)

Entstanden

  • 2016

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