Estimating the Foreclosure Effect of Exclusive Dealing: Evidence from the Entry of Specialty Beer Producers
2011/02/22
研討會日期 : 2011-02-22
時間 : 14:30
主講人 : Ms. Chia-Wen Chen
地點 : Conference Room B110
演講者簡介 : Chia-Wen Chen is going to get her Ph.D. in Economics from University of California, Davis in 2011. Her research field is in industrial organization, applied econometrics, and applied microeconomics.
演講摘要 : Exclusive arrangements that forbid dealers to carry other manufacturers’ products are controversial in competition policy because of their potential foreclosure effect. This paper estimates an entry model of specialty beer producers in Northern California and tests whether exclusive dealing raises a firm’s fixed costs. I model each firm’s entry decision as a static entry game of incomplete information that allows for strategic interactions and exploit a new panel scanner dataset from a major grocery chain in Northern California. Given that both firm and location profitability are heterogeneous, I control for post-entry demand conditions by estimating the demand for beer using a discrete choice model. Using the demand estimates and the predicted entry probabilities, I recover a firm’s fixed costs using a two-step estimator. I find some spillover effects on specialty beer producers’ entry decisions. After taking strategic interactions into account, the results indicate that a firm has higher fixed costs at locations with exclusive distributors. The estimates also show that a firm is less likely to enter a location that is farther from its brewery, has lower expected demand or is smaller in store size. Finally, I implement counter-factual experiments to study the effect of banning exclusive dealing. The results show that the welfare improvement associated with banning exclusive contracts is very small.
