Exclusive versus common dealership

In a setting with two differentiated producers and identical retailers, we analyzed whether the producers will have a distribution system with one or several retailers. In contrast to the existing literature, we allow for ful l foreclosure under both types of distribution systems. We find, in contras t to what has been shown in the received literature, that the producers wil l prefer a distribution system with a single common retailer to a system wi th separate exclusive dealers.