Advanced Search
MyIDEAS: Login to save this paper or follow this series

Market-Share Contracts with Asymmetric Information

Contents:

Author Info

  • Adrian Majumdar

    ()
    (Centre for Competition Policy, University of East Anglia)

  • Greg Shaffer

    ()
    (Simon School of Business, University of Rochester)

Registered author(s):

    Abstract

    In this paper, a dominant supplier and competitive fringe supply goods to a common buyer who has private information about the state of demand. We give conditions under which market-share contracts are profitable, and we show that, in some cases, the full-information outcome can be obtained (unlike in standard screening models, where the agents earns an information rent in the high state and demand is distorted in the low state). Our results also inform the antitrust debate on bundling, fidelity rebates and all-units discounts. We provide a new motive for a dominant firm to bundle its own product with a competitively supplied product (with ambiguous consequences for welfare), and we show that the market-share contracts, which are a subset of fidelity rebates, are more profitable than all-units discounts.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.ccp.uea.ac.uk/publicfiles/workingpapers/CCP07-17.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 07-17.

    as in new window
    Length: 29 pages
    Date of creation: Sep 2007
    Date of revision:
    Handle: RePEc:ccp:wpaper:wp07-17

    Contact details of provider:
    Postal: Norwich, NR4 7TJ
    Phone: +44(0)1603 593715
    Fax: +44(0)1603 591622
    Email:
    Web page: http://www.ccp.uea.ac.uk
    More information through EDIRC

    Related research

    Keywords: Adverse selection; screening; bundling; fidelity rebates; all-units discounts;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ccp:wpaper:wp07-17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cheryl Whittkaer) The email address of this maintainer does not seem to be valid anymore. Please ask Cheryl Whittkaer to update the entry or send us the correct address.

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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