This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Private label, quality choice and bargaining power in a vertical structure

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Bergès-Sennou, F.
Mitraille, S.

Additional information is available for the following registered author(s):

Abstract

We show that a private label is an indirect mean to contract on quality in a vertical structure, and is signed by a downstream firm only when its bargaining power is high. When its bargaining power decreases, sharing the fixed cost of quality in a private label with the upstream firm is not profitable : the label is not implemented, leaving the entire cost to the upstream who in turn under-invests in quality. Public intervention through a minimum quality standard may fail to restore the second-best and even increase the distorstion by deterring the downstream to create the label when its bargaining power high. ...French Abstract : Les auteurs montrent qu'une marque de distributeur (MDD) est un moyen indirect pour contracter sur la qualité dans une structure verticale, et un tel contrat n'est signé que lorsque le pouvoir de négociation de la firme aval est suffisamment élevé. Lorsque le pouvoir de la firme aval décroît, partager le coût fixe de la qualité de la MDD avec la firme amont n'est pas profitable : la MDD n'est pas mise en place, et le coût en qualité est uniquement assuré par la firme amont qui en conséquence sous-investit en qualité. L'intervention publique grâce à l'instauration d'une norme minimale de qualité peut cependant ne pas restaurer la qualité de second rang et même accroître la distorsion en dissuadant la firme aval de créer la MDD lorsque son pouvoir de négociation est élevé.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.toulouse.inra.fr/centre/esr/wpRePEc/ber200304.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse) in its series Economics Working Paper Archive (Toulouse) with number 52.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 37 p.
Date of creation: 2003
Date of revision:
Handle: RePEc:rea:inrawp:52

Contact details of provider:
Postal: INRA ESR - BP27 - 31326 Castanet Tolosan cedex - France
Fax: (33) 5.61.28.53.72
Web page: http://www.toulouse.inra.fr/esr
More information through EDIRC

Order Information:
Postal: INRA ESR - BP27 - 31326 Castanet Tolosan cedex - France
Email:

For technical questions regarding this item, or to correct its listing, contact: (RAYNAL Helene).

Related research
Keywords: QUALITY VERTICAL STRUCTURE PRIVATE LABEL BARGAISING POWER MINIMUM QUALITY STANDARDS MARQUE DE DISTRIBUTEUR LABEL DE QUALITE CONCURRENCE ECONOMIQUE CONCENTRATION VERTICALE

Find related papers by JEL classification:
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-58, December. [Downloadable!] (restricted)
    Other versions:
  2. Besanko, David & Donnenfeld, Shabtai & White, Lawrence J, 1987. "Monopoly and Quality Distortion: Effects and Remedies," The Quarterly Journal of Economics, MIT Press, vol. 102(4), pages 743-67, November. [Downloadable!] (restricted)
  3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August. [Downloadable!] (restricted)
    Other versions:
  4. Gow, Hamish R & Swinnen, Johan F M, 1998. "Up- and Downstream Restructuring, Foreign Direct Investment, and Hold-Up Problems in Agricultural Transition," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 25(3), pages 331-50.
  5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August. [Downloadable!] (restricted)
  6. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics. [Downloadable!]
  7. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-85, July. [Downloadable!] (restricted)
    Other versions:
  8. Sheshinski, Eytan, 1976. "Price, Quality and Quantity Regulation in Monopoly Situations," Economica, London School of Economics and Political Science, vol. 43(17), pages 127-37, May. [Downloadable!] (restricted)
  9. Economides, Nicholas, 1999. "Quality choice and vertical integration," International Journal of Industrial Organization, Elsevier, vol. 17(6), pages 903-914, August. [Downloadable!] (restricted)
    Other versions:
  10. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? RePEc encourages publishers to make their bibliographic data freely available to the public.

This page was last updated on 2008-7-1.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.