Does Retailer Power Lead to Exclusion?

Rey, Patrick and Whinston, Michael (2011) Does Retailer Power Lead to Exclusion? TSE Working Paper, n. 11-227, Toulouse

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Official URL: http://tse-fr.eu/pub/24306

Abstract

This paper 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 showed 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: Monograph (Working Paper)
Language: English
Date: February 2011
Place of Publication: Toulouse
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 18 Jan 2012 06:03
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:24306
URI: http://publications.ut-capitole.fr/id/eprint/3505

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