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Slotting allowances and price-cost margins: A note

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  • Azzeddine M. Azzam;

    (103 Filley Hall, Department of Agricultural Economics,, University of Nebraska-Lincoln, Lincoln, NE 68583-0922., E-mail: aazzam1@unl.edu)

Abstract

It has become common practice for retail grocers to charge grocery manufacturers a slotting allowance for placing products on the retail shelf. Manufacturers view the allowance as anti-competitive. Retailers view it as compensation for the risks associated with stocking new products. The largely theoretical literature on the subject is consistent with both views. This article proposes an empirical model to test the effect of slotting allowances on performance, and discusses if and how the model can be tied to the qualitative predictions of existing theoretical literature. [JEL classification: L100, L140, L420] © 2001 John Wiley & Sons, Inc.

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File URL: http://hdl.handle.net/10.1002/agr.1025
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 17 (2001)
Issue (Month): 3 ()
Pages: 417-422

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Handle: RePEc:wly:agribz:v:17:y:2001:i:3:p:417-422

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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  1. Greg Shaffer, 1991. "Slotting Allowances and Resale Price Maintenance: A Comparison of Facilitating Practices," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 120-135, Spring.
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Cited by:
  1. Herrmann, Roland & Moser, Anke & Werner, Elke, 2002. "Neue empirische Befunde zur Preissetzung und zum Verbraucherverhalten im Lebensmitteleinzelhandel," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(2).
  2. Geng, Qin & Minutolo, Marcel C., 2010. "Failure fee under stochastic demand and information asymmetry," International Journal of Production Economics, Elsevier, Elsevier, vol. 128(1), pages 269-279, November.
  3. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, Wiley Blackwell, vol. 54(1), pages 89-109.
  4. Rennhoff, Adam D., 2004. "Paying For Shelf Space: An Investigation Of Merchandising Allowances In The Grocery Industry," Research Reports, University of Connecticut, Food Marketing Policy Center 25155, University of Connecticut, Food Marketing Policy Center.

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