Original title: Naked exclusion with heterogeneous buyers
Authors: Chen, Y. ; Zápal, Jan
Document type: Research reports
Year: 2022
Language: eng
Series: CERGE-EI Working Paper Series, volume: 741
Abstract: We investigate the effects of buyer heterogeneity in a market in which an incumbent firm prevents entry when it signs enough exclusionary contracts with buyers. With heterogeneous buyers several well-known results in exclusionary contracting with homogenous buyers are overturned and novel ones emerge. First, inefficient equilibria exist in which exclusionary contracts are signed but entry still occurs, and the loss of consumer surplus falls on small buyers. Second, sequential contracting may be more pro-competitive than simultaneous contracting in the sense that entry occurs under sequential but not simultaneous contracting. When this happens, sequential Pareto dominates simultaneous contracting.
Keywords: buyer heterogeneity; contracting with externalities; exclusionary contracts
Project no.: LQ300852101 (CEP)
Funding provider: AV ČR

Institution: Economics Institute AS ČR (web)
Document availability information: Fulltext is available at external website.
External URL: https://www.cerge-ei.cz/pdf/wp/Wp741.pdf
Original record: https://hdl.handle.net/11104/0338736

Permalink: http://www.nusl.cz/ntk/nusl-519933


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