IDEAS home Printed from https://ideas.repec.org/a/ecm/emetrp/v58y1990i3p621-36.html
   My bibliography  Save this article

Transactions/List Pricing

Author

Listed:
  • Seidmann, Daniel J

Abstract

Suppose that a representative downstream firm must buy relationship-specific capital before trading with an upstream monopolist. Under reasonable conditions, the monopolist would precommit to price to induce greater investment. If the monopolist were privately informed of its unit costs after the downstream firms invested, then the optimal contract would specify a maximum (" list") price which might be discounted (to "transactions" prices) if costs were low: a mode of pricing prevalent in interfirm trade. These results may explain why G. J. Stigler and J. K. Kindahl's medium-term price series tracked wholesale price indices whenever the latter were nondecreasing, but otherwise fell significantly faster. Copyright 1990 by The Econometric Society.

Suggested Citation

  • Seidmann, Daniel J, 1990. "Transactions/List Pricing," Econometrica, Econometric Society, vol. 58(3), pages 621-636, May.
  • Handle: RePEc:ecm:emetrp:v:58:y:1990:i:3:p:621-36
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0012-9682%28199005%2958%3A3%3C621%3ATP%3E2.0.CO%3B2-R&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:emetrp:v:58:y:1990:i:3:p:621-36. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.