Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, April 16, 2013

Paying not to sell

Posted by D. Daniel Sokol

E. Bacchiega (Bologna), O. Bonroy (INRA) and R. Mabrouk (Grenoble) suggest Paying not to sell.

ABSTRACT: In this paper we show that, in the presence of buyer and seller power, a monopolist can enter into a costly contractual relationship with a low-quality supplier with the sole intention of improving its bargaining position relative to a high-quality supplier, without ever selling the good produced by that firm.

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