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Exclusive Dealing and the Whiskey Trust, 1890–1895

Published online by Cambridge University Press:  03 March 2009

Werner Troesken
Werner Troesken
Affiliation:
Associate Professor of History and Economics, Department of History, University of Pittsburgh, Pittsburgh PA 15260. e-mail: [email protected]
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Abstract

This article uses the history of the Whiskey Trust to explore the competitive effects of vertical restraints such as exclusive dealing. The Whiskey Trust distilled alcoholic spirits and bribed distributors not to carry competing brands of spirits. For the Whiskey Trust, exclusive dealing was an ineffective predatory strategy. Despite the trust's market dominance and manifold predatory strategies, it failed to preempt entry. The trust failed, in part, because its rivals could vertically integrate at low cost. Competition disciplined the trust more effectively than did numerous antitrust suits.

Type
Articles
Information
The Journal of Economic History , Volume 58 , Issue 3 , September 1998 , pp. 755 - 778
Copyright
Copyright © The Economic History Association 1998

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