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Lump-Sum Quota Bonuses And Other Vertical Restraints With Cournot Retailers

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  • Chris Y. Tung
  • Chun-chieh Wang

Abstract

Lump-sum quota bonuses are a specific type of quota bonus that provides a lump-sum transfer from a manufacturer to a retailer when the retailer’s sales exceed a pre- determined quota. This paper explores whether lump-sum quota bonuses and two other vertical restraints, two-part tariffs and resale price maintenance, can resolve the double marginalization problem when the market size is uncertain. It emerges that only lump-sum quota bonuses can always resolve the double marginalization problem in our two-state case.

Suggested Citation

  • Chris Y. Tung & Chun-chieh Wang, 2013. "Lump-Sum Quota Bonuses And Other Vertical Restraints With Cournot Retailers," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(3), pages 75-88.
    • Handle: RePEc:ibf:gjbres:v:7:y:2013:i:3:p:75-88
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    More about this item

    Keywords

    Vertical Restraints; Lump-Sum Quota Bonuses; Cournot Competition; Uncertain Market Size;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other

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