Deconstructing Chicago on Exclusive Dealing

Predatory Exclusive Dealing Predatory Exclusive Dealing *

While the previous literature on exclusive dealing has been concerned with the question of how exclusive dealing can raise static profits, this paper analyzes the question of how exclusive dealing can be used to predate in a dynamic context. It is shown that exclusive dealing may arise even if it reduces static profits. Exclusivity provisions may not only allow excluding efficient competitors, ...

Buyer - Induced Exclusive Dealing

Large retailers or distributors may exercise buyer power in their interactions with manufacturers in order to obtain preferential terms of sale. This paper explores the use of exclusive dealing arrangements by a monopoly retailer to win advantageous pricing from competing manufacturers of a differentiated product. When consumers’ brand preferences are weak and/or when one brand is preferred by ...

Exclusive dealing with network effects

This paper explores the ability of an incumbent to use introductory offers to dominate a market in the face of a more efficient rival when network effects rather than scale economies are present. Both in the case of one-sided and two sided markets, for introductory offers to be profitable when consumers can multihome, they need to be discriminatory and exclusive. In this setting, exclusivity as...

Unilateral Conduct Workbook Chapter 5: Exclusive Dealing

Diagnosing Foreclosure due to Exclusive Dealing

Exclusive dealing arrangements, in which a distributor contracts to work exclusively with a single manufacturer, can be efficiency enhancing or they can be an anticompetitive means to foreclose markets. This paper evaluates the effect of exclusive distribution arrangements on competition in the Chicago beer market in 1994. A diagnostic test is provided to judge whether exclusive arrangements be...