Wholesale Price Discrimination between High Street Retailers and Online Retailers
AbstractWe analyze wholesale pricing and retail pricing when a monopolistic manufacturer sells its product to a high street retailer and an online electronic retailer, which have different selling qualities and marginal selling costs. We observe that (1) the wholesale price for an online electronic retailer is higher than that for a high street retailer if an online electronic retailer's selling cost advantage is greater than its selling quality disadvantage for all consumers buying products, and (2) the retail price of the e-retailer is necessarily lower than that of the c-retailer independent of conditions.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2007)
Issue (Month): 31 ()
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Find related papers by JEL classification:
- L8 - Industrial Organization - - Industry Studies: Services
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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