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What incentive conflict was being controlled by these loyalty payments

07/04/2021 Client: muhammad11 Deadline: 2 Day

I’m stuck on a Economics question and need an explanation.

Intel made large loyalty payments to HP in exchange for HP buying most of their chips from Intel instead of rival AMD. AMD sued Intel under the antitrust laws, and Intel settled the case by paying $1.25 billion to AMD.

What incentive conflict was being controlled by these loyalty payments?

What advice did Intel ignore when they adopted this practice?

Why did they ignore it?

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