Naked exclusion in the lab

The case of sequential contracting

Research output: Contribution to journalArticleScientificpeer-review

Abstract

In the context of the naked exclusion model of Rasmusen, Ramseyer
and Wiley [1991] and Segal and Whinston [2000b], we examine whether
sequential contracting is more conducive to exclusion in the lab, and
whether it is cheaper for the incumbent than simultaneous contracting.
We find that an incumbent who proposes contracts to buyers sequentially,
excludes significantly more often than an incumbent who proposes
contracts simultaneously. In contrast to theory, this comes at a
substantial cost for the incumbent. Accounting for the observation that
buyers are more likely to accept an exclusive contract the higher the
payment, substantially improves the fit between theoretical predictions
and observed behavior.
Original languageEnglish
Pages (from-to)137-166
JournalJournal of Industrial Economics
Volume62
Issue number1
DOIs
Publication statusPublished - 2014

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Exclusion
Incumbents
Contracting
Exclusive contracts
Buyers
Costs

Cite this

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Naked exclusion in the lab : The case of sequential contracting. / Boone, J.; Müller, W.; Suetens, S.

In: Journal of Industrial Economics, Vol. 62, No. 1, 2014, p. 137-166.

Research output: Contribution to journalArticleScientificpeer-review

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