All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Barna Bakó
''Exclusive contracts with vertically differentiated products''
( 2012, Vol. 32 No.2 )
In this paper we develop a simple model to analyze the effects of exclusive contracts in vertically integrated markets where both the upstream and the downstream market are characterized as oligopolies and manufacturers produce vertically differentiated products. We find that firms prefer to deal exclusively with retailers. If the extent of consumers' heterogeneity is small, manufacturers offer exclusive contracts unilaterally. On the other hand, if consumers' valuations differ significantly both manufacturers engage in exclusive contracting.
Keywords: vertical differentiation, exclusive contracts, double marginalization
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Nov 24 2011 Manuscript Accepted : Apr 29 2012

  This abstract has been downloaded 1705 times                The Full PDF of this paper has been downloaded 154646 times