Vertical Restraints in a Model of Vertical Differentiation
AbstractThe authors consider the case of a manufacturer who sells a homogeneous good to retailers who compe te in prices and "cum-sales" or "post-sales" services. They show that the optimal linear-price contract is inefficient from the point of view of the vertical structure and that simple forms of vertical r estraints, such as resale price maintenance and franchise fees, domin ate the optimal linear-price contract, but do not restore vertical ef ficiency. Their analysis is concluded with the description of an effi cient contract. Copyright 1988, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 103 (1988)
Issue (Month): 3 (August)
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- Dulleck, Uwe & Kerschbamer, Rudolf, 2009.
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- Kenji, Matsui, 2011. "Resale price maintenance for supply chains distributing products with demand uncertainty," International Journal of Production Economics, Elsevier, vol. 134(2), pages 375-387, December.
- Yossef Spiegel & Yaron Yehezkel, 2000. "Price and Non-Price Restraints When Retailers are Vertically Differentiated," Econometric Society World Congress 2000 Contributed Papers 1670, Econometric Society.
- Dulleck, Uwe & Kerschbamer, Rudolf, 2005. "Experts vs Discounters: Competition and Market Unravelling When Consumers Do Not Know What they Need," CEPR Discussion Papers 5242, C.E.P.R. Discussion Papers.
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