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| Author: | McAfee, R. Schwartz, M. |
| Title: | Opportunism in multilateral vertical contracting: nondiscrimination, exclusivity, and uniformity |
| Journal: | American Economic Review
1994 : MAR, VOL. 84:1, p. 210-230 |
| Index terms: | CONTRACTS FRANCHISING ECONOMICS |
| Language: | eng |
| Abstract: | An input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts. Efficient commitment, however , would require complete contracts. The authors study instead bilateral contracting, without commitment regarding others' terms. Each firm then fears that the supplier might opportunistically renegotiate another's contract to increase bilateral profit at the firm's expense. The authors show that nondiscrimination clauses generally can not curb such third-party opportunism, even with symmetric firms. |
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