Nonlinear Pricing and Exclusion: II. Must-Stock Products

Arbeitspapier

We adapt the exclusion model of Choné and Linnemer (2014) to reflect the notion that dominant firms are unavoidable trading partners. In particular, we introduce the share of the buyer's demand that can be addressed by the rival as a new dimension of uncertainty. Nonlinear price-quantity schedules allow the dominant firm to adjust the competitive pressure placed on the rival to the size of the contestable demand, and to distort the rival supply at both the extensive and intensive margins. When disposal costs are sufficiently large, this adjustment may yield highly nonlinear and locally decreasing schedules, such as retroactive rebates .

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 4874

Classification and Topics

• Classification: Wirtschaft ; Monopoly; Monopolization Strategies ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts ; Asymmetric and Private Information; Mechanism Design ; Economics of Contract: Theory
• Subject: inefficient exclusion ; buyer opportunism ; disposal costs ; quantity rebates ; incomplete information

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Choné, Philippe ; Linnemer, Laurent
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/102142
• Last update: 10.03.2025, 11:42 AM CET