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Author: | Gans, J. S. King, S. P. |
Title: | Exclusionary contracts and competition for large buyers |
Journal: | International Journal of Industrial Organization
2002 : NOV, VOL. 20:9, p. 1363-1381 |
Index terms: | Contracts Buying Purchasing Competition |
Language: | eng |
Abstract: | The authors demonstrate that large buyers will have an incentive to form a coalition with a single firm so as to extract rents from the small customer segment. Market dominance results. The outcome is socially suboptimal as either production takes place at ahigher cost than is otherwise possible or there is a monopoly for small buyers with an associated allocative loss. |
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