Naked Exclusion

Towards a Behavioral Approach to Exclusive Dealing

Research output: Working paperDiscussion paperOther research output

258 Downloads (Pure)

Abstract

We report experimental results on exclusive dealing inspired by the literature on "naked exclusion". Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates compared to the non-discriminatory case only when payments to buyers can be offered sequentially and secretly. Third, allowing discrimination does not lead to significant decreases in costs of exclusion. Accounting for the observation that buyers are more likely to accept an exclusive deal the higher is the payment, substantially improves the fit between theoretical predictions and observed behavior.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages44
Volume2009-30
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-30

Fingerprint

Exclusive dealing
Exclusion
Buyers
Payment
Prediction
Incumbents
Discrimination
Costs

Keywords

  • exclusive dealing
  • entry deterrence
  • foreclosure
  • contracts
  • externalities
  • coordination
  • experiments

Cite this

Boone, J., Müller, W., & Suetens, S. (2009). Naked Exclusion: Towards a Behavioral Approach to Exclusive Dealing. (CentER Discussion Paper; Vol. 2009-30). Tilburg: Microeconomics.
@techreport{6613eb2c633948e1b94064ea91eba827,
title = "Naked Exclusion: Towards a Behavioral Approach to Exclusive Dealing",
abstract = "We report experimental results on exclusive dealing inspired by the literature on {"}naked exclusion{"}. Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates compared to the non-discriminatory case only when payments to buyers can be offered sequentially and secretly. Third, allowing discrimination does not lead to significant decreases in costs of exclusion. Accounting for the observation that buyers are more likely to accept an exclusive deal the higher is the payment, substantially improves the fit between theoretical predictions and observed behavior.",
keywords = "exclusive dealing, entry deterrence, foreclosure, contracts, externalities, coordination, experiments",
author = "J. Boone and W. M{\"u}ller and S. Suetens",
note = "Pagination: 44",
year = "2009",
language = "English",
volume = "2009-30",
series = "CentER Discussion Paper",
publisher = "Microeconomics",
type = "WorkingPaper",
institution = "Microeconomics",

}

Boone, J, Müller, W & Suetens, S 2009 'Naked Exclusion: Towards a Behavioral Approach to Exclusive Dealing' CentER Discussion Paper, vol. 2009-30, Microeconomics, Tilburg.

Naked Exclusion : Towards a Behavioral Approach to Exclusive Dealing. / Boone, J.; Müller, W.; Suetens, S.

Tilburg : Microeconomics, 2009. (CentER Discussion Paper; Vol. 2009-30).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Naked Exclusion

T2 - Towards a Behavioral Approach to Exclusive Dealing

AU - Boone, J.

AU - Müller, W.

AU - Suetens, S.

N1 - Pagination: 44

PY - 2009

Y1 - 2009

N2 - We report experimental results on exclusive dealing inspired by the literature on "naked exclusion". Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates compared to the non-discriminatory case only when payments to buyers can be offered sequentially and secretly. Third, allowing discrimination does not lead to significant decreases in costs of exclusion. Accounting for the observation that buyers are more likely to accept an exclusive deal the higher is the payment, substantially improves the fit between theoretical predictions and observed behavior.

AB - We report experimental results on exclusive dealing inspired by the literature on "naked exclusion". Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates compared to the non-discriminatory case only when payments to buyers can be offered sequentially and secretly. Third, allowing discrimination does not lead to significant decreases in costs of exclusion. Accounting for the observation that buyers are more likely to accept an exclusive deal the higher is the payment, substantially improves the fit between theoretical predictions and observed behavior.

KW - exclusive dealing

KW - entry deterrence

KW - foreclosure

KW - contracts

KW - externalities

KW - coordination

KW - experiments

M3 - Discussion paper

VL - 2009-30

T3 - CentER Discussion Paper

BT - Naked Exclusion

PB - Microeconomics

CY - Tilburg

ER -