Corvinus
Corvinus

Reciprocally Exclusive Contracts and Endogenous Quality

Bakó, Barna (2013) Reciprocally Exclusive Contracts and Endogenous Quality. Working Paper. Corvinus University of Budapest, Department of Microeconomics.

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Abstract

Our paper investigates exclusive dealing and purchasing in successive duopolies. First we show that using a limited set of feasible contracts, exclusive dealing and purchasing is going to be preferred, regardless of the level of product differentiation. In the next step, we make the choice of quality endogenous and derive the equilibrium conditions for qualities under the aforementioned contractual arrangement. Our final proposition shows that in this case the choice of quality depends exclusively on the valuation of the median consumer.

Item Type:Monograph (Working Paper)
Uncontrolled Keywords:vertical differentiation, exclusive contracts, endogenous quality, JEL: L14, K12, D43
Subjects:Economics
Funders: Lendület Fiatal Kutatói Program / Momentum Program of the Hungarian Academy of Sciences
Projects:"Lendület" Strategic Interactions Research Group
ID Code:1265
Deposited By: Barna Bakó
Deposited On:20 Jun 2013 06:13
Last Modified:20 Jun 2013 06:15

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