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, the authors 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. The authors' theoretical results are also set in relation to some findings from the Norwegian grocery industry. Copyright 1999 by The editors of the Scandinavian Journal of Economics.
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Paper
Staahl Gabrielsen, T. & Sorgard, L., 1994.
"Discount Chains and Brand Policy,"
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13-94, Norwegian School of Economics and Business Administration-.
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