Tuesday, February 12, 2013

Exclusive Dealing Market Power and Competition

Exclusive Dealing Market Power and Competition - The Economics of Exclusive Dealing vy Dave O’Connell, The Irish Competition Authority. Exclusive dealing can be efficiency-enhancing if it protects investment incentives for incumbent sellers. If third parties can free-ride on the investment of an upstream firm, the upstream firm has weaker incentives to invest. For exclusive dealing to harm competition, the decrease in the alleged victim’s residual demand must be large enough to deter them from entering or remaining on the market."

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