Naked Exclusion: An Experimental Study of Contracts with Externalities
Landeo, Claudia M., and
Kathryn E. Spier. 2009. "Naked Exclusion: An Experimental Study of Contracts with Externalities."
American Economic Review,
This paper reports the results of an experiment on exclusive contracts. We replicate
the strategic environment described by Rasmusen, Ramseyer, and Wiley
(1991) and Segal and Whinston (2000). Our findings are as follows. First, when
the buyers can communicate, discrimination raises the likelihood of exclusion.
Second, when the incumbent seller is unable to discriminate and must make
the same offers to the buyers, communication reduces the likelihood of exclusion.
Communication also induces more generous offers when the seller cannot
discriminate, and divide-and-conquer offers when the seller can discriminate.
Third, when communication is allowed, payoff endogeneity increases the likelihood
of exclusion. (JEL C72, C91, D62, D86, K12, K21, L12, L42)
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Landeo, Claudia M. (U Alberta and Northwestern U)
Spier, Kathryn E. (Harvard U)
C72: Noncooperative Games
C91: Design of Experiments: Laboratory, Individual
D86: Economics of Contract: Theory
K12: Contract Law
K21: Antitrust Law
L12: Monopoly; Monopolization Strategies