Predatory accommodation: below-cost pricing without exclusion in intermediate goods markets

Article Abstract:

A study was conducted to show that below-cost pricing can result in intermediate goods markets when a monopolist retailer sequentially negotiates with two suppliers with substitute products. The welfare impact of below-cost pricing was examined. Ways on how courts can determine below-cost pricing as anticompetitive in the intermediate goods market were proposed. Results indicated that the retailer and one of the supplier can optimize their joint profit at the expense of the second supplier.

Retail Trade, Pricing Policy, Retail industry

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On the dampening-of-competition effect of exclusive dealing

Article Abstract:

Exclusive dealing, vertical integration, and sales through a common retailer are compared in terms of profit and welfare effects. Results of a three-stage game partially support Lin's analysis but suggest need for revision of some of his policy conclusions. Manufacturers are found by the analysis to reap higher profits from vertical integration than from non-exclusive dealing. Support is found for desireable welfare properties for exclusive dealing.

Noncommercial research organizations, Exclusive dealing agreements

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Vertical control with bilateral contracts

Article Abstract:

A study was done to analyze the vertical control suppliers have in product distribution through retail channels. Earlier findings suggest that these suppliers achieve the vertical result with nonlinear contracts in the absence of uncertainty and only retail prices are controlled. Results of the current study show that earlier conclusions are not valid when retailers choose contracts which offer lower prices and maximize their profits.

Contracts, Distribution of goods, Distribution (Commerce), Distribution (Probability theory)

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