Consumer-benefiting exclusive territories
Abstract
I investigate the effect of exclusive territories, which are typical vertical controls imposed by upstream firms. Using shipping spatial models, I consider an industry that consists of many independent local markets. An upstream monopolist restricts competition between downstream firms using exclusive territories. I find that exclusive territories reduce the prices of final products in all local markets in quantity-setting competition. In price-setting competition, they raise prices in half the local markets, reduce them in other markets, and also reduce the total consumer surplus.Download Info
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Bibliographic Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 36 (2003)
Issue (Month): 4 (November)
Pages: 1007-1025
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Related research
Keywords:Find related papers by JEL classification:
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Other Production and Pricing Analysis
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Stefano Colombo, 2011. "Spatial price discrimination in the unidirectional Hotelling model with elastic demand," Journal of Economics, Springer, vol. 102(2), pages 157-169, March.
- Takeshi Ikeda & Daisuke Nikae, 2006. "Exclusive territories in the presence of upstream competition," Economics Bulletin, AccessEcon, vol. 4(26), pages 1-6.
- Takeshi Ebina & Toshihiro Matsumura & Daisuke Shimizu, 2009. "Mixed oligopoly and spatial agglomeration in quasi-linear city," Economics Bulletin, AccessEcon, vol. 29(4), pages 2722-2729.
- Matsumura, Toshihiro & Shimizu, Daisuke, 2005. "Economic welfare in delivered pricing duopoly: Bertrand and Cournot," Economics Letters, Elsevier, vol. 89(1), pages 112-119, October.
- Toshihiro Matsumura & Noriaki Matsushima, 2012. "Spatial Cournot competition and transportation costs in a circular city," The Annals of Regional Science, Springer, vol. 48(1), pages 33-44, February.
- Hiroaki Ino & Toshihiro Matsumura, 2009.
"What role should public enterprises play in free-entry markets?,"
Discussion Paper Series
46, School of Economics, Kwansei Gakuin University, revised Jun 2009.
- Hiroaki Ino & Toshihiro Matsumura, 2010. "What role should public enterprises play in free-entry markets?," Journal of Economics, Springer, vol. 101(3), pages 213-230, November.
- Matsumura, Toshihiro & Shimizu, Daisuke, 2005. "Spatial Cournot competition and economic welfare: a note," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 658-670, November.
- repec:ebl:ecbull:v:4:y:2004:i:15:p:1-6 is not listed on IDEAS
- Matsushima, Noriaki & Matsumura, Toshihiro, 2006. "Mixed oligopoly, foreign firms, and location choice," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 753-772, November.
- Colombo, Stefano, 2011. "On the rationale of spatial discrimination with quantity-setting firms," Research in Economics, Elsevier, vol. 65(3), pages 254-258, September.
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