Long-term arrangements between buyers and sellers, called domesticated markets, previously have been seen to lessen horizontal competition among sellers. This article argues that domesticated markets have an additional effect on competition: the erection of barriers to entry. In particular, potential new sellers face a reduction in the number of independent buyers, which constricts available market opportunities and thereby discourages entry. A measure of the barrier effect is introduced, examples of the application of the measure are presented, and properties of the measure are discussed.
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