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Discount Chains and Brand Policy

Author

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  • Tommy Staahl Gabrielsen
  • Lars Sørgard

Abstract

Retail chains are observed in many industries. The question addressed here is whether retail chains can exploit buyer power by excluding some brands. In a theoretical model with two differentiated producers and a single retailer, we show that a retailer will require exclusivity (exclude a brand) if the brands are sufficiently symmetric in demand potential. Exclusivity will increase welfare if the excluded brand is a close substitute for the brand carried by the retailer. Our theoretical results are also set in relation to some findings from the Norwegian grocery industry. JEL Classification: L12; L42

Suggested Citation

  • Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Discount Chains and Brand Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 127-142, March.
    • Handle: RePEc:bla:scandj:v:101:y:1999:i:1:p:127-142
    DOI: 10.1111/1467-9442.00145
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    Cited by:

    1. Rafael Moner‐Colonques & José J. Sempere‐Monerris & Amparo Urbano, 2011. "Product Line Choice in Retail Duopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 777-802, September.
    2. Ramon Fauli-Oller & Borja Mesa-Sánchez, 2015. "Losses from Horizontal Merger: an Extension to a Successive Oligopoly Model with Product Differentiation," Manchester School, University of Manchester, vol. 83(5), pages 604-621, September.
    3. Gabrielsen, Tommy Staahl, 2005. "Slotting Allowances and Buy-Back Clauses," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24580, European Association of Agricultural Economists.
    4. Cong Pan, 2016. "Retailer’s product line choice with manufacturer’s multichannel marketing," ISER Discussion Paper 0976, Institute of Social and Economic Research, Osaka University.
    5. David E. Mills, 2017. "Buyer‐Induced Exclusive Dealing," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 66-81, July.
    6. Ramon Fauli‐Oller & Joel Sandonís, 2021. "Buyer power, product assortment and asymmetric retail formats," Bulletin of Economic Research, Wiley Blackwell, vol. 73(2), pages 196-211, April.
    7. Yuxin Chen & Xinxin Li, 2013. "Group Buying Commitment and Sellers’ Competitive Advantages," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(1), pages 164-183, March.
    8. Gabrielsen, Tommy Staahl & Sorgard, Lars, 2007. "Private labels, price rivalry, and public policy," European Economic Review, Elsevier, vol. 51(2), pages 403-424, February.

    More about this item

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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