Does Retailer Power Lead to Exclusion?
AbstractThis paper examines whether retailer bargaining power and upfront slotting allowances prevent small manufacturers (who have no bargaining power) from obtaining adequate distribution. In contrast to the findings of Marx and Shaffer (2007), who showed that all equilibria involve limited distribution (i.e., exclusion of a retailer), we show that there is always an equilibrium in which full distribution is obtained, provided that full distribution is the industry profit-maximizing outcome. The key feature leading to this differing result is that we do not restrict each retailer to offering the manufacturer a single tariff.
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Bibliographic InfoPaper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 11-227.
Date of creation: Feb 2011
Date of revision:
Other versions of this item:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-BEC-2011-11-28 (Business Economics)
- NEP-COM-2011-11-28 (Industrial Competition)
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- David Martimort & Lars Stole, 2001.
"Contractual Externalities and Common Agency Equilibria,"
CESifo Working Paper Series
581, CESifo Group Munich.
- Martimort David & Stole Lars, 2003. "Contractual Externalities and Common Agency Equilibria," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-40, July.
- Martimort, David & Stole, Lars, 1999. "Contractual Externalities and Common Agency Equilibria," IDEI Working Papers 110, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
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