Rey, Patrick and Vergé, Thibaud (2016) Secret contracting in multilateral relations. TSE Working Paper, n. 16-744, Toulouse

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We develop a general, tractable framework of multilateral vertical contracting, which places no restriction on tariffs and fully accounts for their impact on downstream competition. Equilibrium tariffs are cost-based and replicate the outcome of a multi-brand oligopoly, a finding in line with the analysis of a recent merger. We provide a micro-foundation for this framework, before analyzing the effect of RPM and price parity provisions, and of resale vs. agency business models. Finally, we extend the framework to endogenize the distribution network; we also consider mergers and show that their impact on the distribution network can dominate price effects.

Item Type: Monograph (Working Paper)
Language: English
Date: December 2016
Place of Publication: Toulouse
Uncontrolled Keywords: Bilateral contracting, vertical relationships, agency, resale price maintenance, price parity clauses
JEL Classification: D43 - Oligopoly and Other Forms of Market Imperfection
K21 - Antitrust Law
L13 - Oligopoly and Other Imperfect Markets
L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 09 Jan 2017 16:32
Last Modified: 15 Sep 2021 11:17
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