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Exclusionary practices in two‐sided markets: The effect of radius clauses on competition between shopping centers
Author(s) -
Brühn Tim,
Götz Georg
Publication year - 2018
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2928
Subject(s) - competition (biology) , normative , market definition , consumer welfare , focus (optics) , business , social welfare , welfare , economics , microeconomics , law and economics , industrial organization , market economy , law , market structure , political science , ecology , physics , optics , biology
We analyze exclusionary conduct of platforms in 2‐sided markets. Motivated by recent antitrust cases, we provide a discussion of the likely positive and normative effects of exclusivity clauses, which prevent tenants from opening outlets in other shopping centers covered by the clause. In a standard 2‐sided market model, we show that exclusivity agreements are especially profitable for the incumbent and detrimental to social welfare if competition is intense between the 2 shopping centers. We argue that the focus of courts on market definition is misplaced in markets determined by competitive bottlenecks.