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- Chiara Fumagalli
- Università Bocconi, Milano, Istituto di Economia Politica, Via Gobbi, 5 20136 Milano, Italy.
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- Massimo Motta
- European University Institute, Florence, and Universitat Pompeu Fabra, Barcelona.
説明
<jats:p> Rasmusen et al. (1991) and Segal and Whinston (2000) show that an incumbent monopolist might prevent entry of a more efficient competitor by exploiting externalities among buyers. We show that their results hold only when downstream competition among buyers is weak. Under fierce downstream competition, if entry took place, a free buyer would become more competitive and increase its output and profits at the expense of buyers that sign an exclusive deal with the incumbent. Anticipating that orders from a single buyer would trigger entry, no buyer will sign the exclusive deal and entry will occur. This result is robust across different specifications of the game. </jats:p>
収録刊行物
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- American Economic Review
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American Economic Review 96 (3), 785-795, 2006-05-01
American Economic Association
