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Does Retailer Power Lead to Exclusion?

Rey, Patrick and Whinston, Michael (2013) Does Retailer Power Lead to Exclusion? RAND Journal of Economics, 44 (1). pp. 75-81.

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This article examines whether retailer bargaining power and upfront slotting allowances prevent small manufacturers (who have no bargaining power) from obtaining adequate distribution. In contrast to the findings of Marx and Shaffer (2007), who show that all equilibria involve limited distribution (i.e., exclusion of a retailer), we show that there is always an equilibrium in which full distribution is obtained, provided that full distribution is the industry profit-maximizing outcome. The key feature leading to this differing result is that we do not restrict each retailer to offering the manufacturer a single tariff.

Item Type: Article
Language: English
Date: April 2013
Refereed: Yes
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:42
Last Modified: 07 Mar 2018 13:22
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