Loss-Leaders Banning Laws as Vertical Restraints
AbstractThis paper explores the indirect inflationary mechanism allowed by loss-leaders banning laws. In a model where a monopolist producer sells his product through vertically separated and differentiated retailers, we show that the ban of loss-leading can be used strategically by the producer to increase his wholesale price and pay the retailers through negotiated listing fees, thus raising his profit. The ban turns wholesale prices into floor prices, thus increasing resale price and lessening consumers welfare. These results are robust if the listing fees are two-part tariff.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 3 (2005)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://www.degruyter.com
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bergès-Sennou Fabian & Bontems Philippe & Réquillart Vincent, 2004. "Economics of Private Labels: A Survey of Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-25, February.
- Bliss, Christopher, 1988. "A Theory of Retail Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 375-91, June.
- Claire Chambolle, 2000.
"Stratégies de revente à perte et réglementation,"
2000-52, Centre de Recherche en Economie et Statistique.
- Lal, Rajiv & Matutes, Carmen, 1994. "Retail Pricing and Advertising Strategies," The Journal of Business, University of Chicago Press, vol. 67(3), pages 345-70, July.
- Stiglitz, J. & Rey, P., 1988.
"Vertical Restraints And Producers' Competition,"
13, Princeton, Woodrow Wilson School - Discussion Paper.
- McAfee, R Preston & Schwartz, Marius, 1994. "Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity," American Economic Review, American Economic Association, vol. 84(1), pages 210-30, March.
- Célérier, C., 2009. "Forecasting inflation in France," Working papers 262, Banque de France.
- Dubois, Pierre & Jodar-Rosell, Sandra, 2010.
"Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model,"
IDEI Working Papers
604, Institut d'Économie Industrielle (IDEI), Toulouse.
- Dubois, Pierre & Jodar-Rosell, Sandra, 2010. "Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model," TSE Working Papers 10-159, Toulouse School of Economics (TSE).
- Dubois, Pierre & Jodar Rosell, Sandra, 2010. "Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model," CEPR Discussion Papers 7847, C.E.P.R. Discussion Papers.
- Marie-Laure Allain & Claire Chambolle, 2011.
"Anti-Competitive Effects of resale-Below-Cost Laws,"
- Allain, Marie-Laure & Chambolle, Claire, 2011. "Anti-competitive effects of resale-below-cost laws," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 373-385, July.
- Marie-Laure Allain & Claire Chambolle, 2007. "Anti-Competitive Effects of Resale-Below-Cost Laws," Working Papers 2007-29, Centre de Recherche en Economie et Statistique.
- Rey, Patrick & Chen, Zhijun, 2012.
"Loss Leading as an Exploitative Practice,"
Open Access publications from University of Toulouse 1 Capitole
http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Zhijun Chen & Patrick Rey, 2010. "Loss Leading as an Exploitative Practice," Working Papers hal-00540724, HAL.
- Rey, Patrick & Chen, Zhijun, 2010. "Loss Leading as an Exploitative Practice," TSE Working Papers 10-218, Toulouse School of Economics (TSE), revised Dec 2011.
- Rey, Patrick & Chen, Zhijun, 2010. "Loss Leading as an Exploitative Practice," IDEI Working Papers 658, Institut d'Économie Industrielle (IDEI), Toulouse, revised Dec 2011.
- Vanessa von Schlippenbach, 2008. "Complementarities, Below-Cost Pricing, and Welfare Losses," Discussion Papers of DIW Berlin 788, DIW Berlin, German Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.