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American Economic Review Vol. 90 No. 1 2000

Naked Exclusion: Comment

Ilya Segal1; Michael D. Whinston2

1 Department of Economics, Landau Building, Stanford University, Stanford, CA 94305. · 2 Department of Economics, Northwestern University, 2003 Sheridan Road, Evanston, IL 60208.

Abstract

The ability of an incumbent firm to deter entry by writing exclusionary contracts with customers has been a subject of contention in the antitrust literature. The courts ’ concern with such exclusionary contracts has been challenged by those who argue that an incumbent, faced with buyers whose interest is to promote entry and competition, would have to pay buyers more for the inclusion of exclusionary provisions than it could possibly gain from exclusion. In a provocative article, Eric B. Rasmusen et al. (1991) (henceforth, RRW) have argued that an incumbent may in fact be able to exclude rivals profitably using such contractual provisions

DOI
10.1257/aer.90.1.296
Volume
90
Issue
1
Pages
296-309
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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