Strategic delays of delivery, market separation and demand discrimination
AbstractWe show that an adequate choice of delays to deliver a durable good allows a monopoly to reduce competition between his two retailers on two different markets. Instead of preventing each retailer from selling on both markets, the producer separates the markets by directing the choices of consumers between the retailers. The consumer whose willingness to pay is the lowest obtains the good later than the other, and both pay their highest valuations for the good: the producer perfectly discriminates the demand. The European car market where producers try to restrict competition between retailers is an application of our findings.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 155.
Date of creation: 04 Jun 2003
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delivery delays; discrimination; market separation; vertical restraints; European car market;
Other versions of this item:
- Eric Avenel & Sebastien Mitraille, 2004. "Strategic Delays of Delivery, Market Separation and Demand Discrimination," The Centre for Market and Public Organisation 04/112, Department of Economics, University of Bristol, UK.
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
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