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Naked slotting fees for vertical control of multi-product retail markets

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  • Innes, Robert
  • Hamilton, Stephen F.

Abstract

Slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market. The practice is both increasingly common and increasingly controversial. This note shows how imperfectly competitive retailers and a monopolistic supplier of one good can use "naked" slotting fees – charges imposed on competitive suppliers of other goods – to extract rent in vertically integrated multi-good markets.
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Suggested Citation

  • Innes, Robert & Hamilton, Stephen F., 2006. "Naked slotting fees for vertical control of multi-product retail markets," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 303-318, March.
  • Handle: RePEc:eee:indorg:v:24:y:2006:i:2:p:303-318
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    References listed on IDEAS

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    Cited by:

    1. Stéphane Caprice & Vanessa Schlippenbach, 2013. "One-Stop Shopping as a Cause of Slotting Fees: A Rent-Shifting Mechanism," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(3), pages 468-487, September.
    2. Yaron Yehezkel, 2014. "Motivating a Supplier to Test Product Quality," Journal of Industrial Economics, Wiley Blackwell, vol. 62(2), pages 309-345, June.
    3. Hamilton, Stephen F. & Bontems, Philippe & Lepore, Jason, 2015. "Oligopoly intermediation, relative rivalry and market conduct," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 49-59.
    4. Robert Innes & Stephen F. Hamilton, 2009. "Vertical restraints and horizontal control," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 120-143.
    5. Bontems, Philippe & Dhar, Tirtha & Chavas, Jean- Paul, 2007. "Role of Bargaining in Marketing Channel Games of Quality Choice and Profit Share," Working Papers 201521, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    6. repec:eee:ecolet:v:158:y:2017:i:c:p:34-36 is not listed on IDEAS
    7. Karp, Larry & Perloff, Jeffrey, 2011. "The iPhone Goes Downstream: Mandatory Universal Distribution∗," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7vc007jh, Department of Agricultural & Resource Economics, UC Berkeley.
    8. Hamilton, Stephen & Innes, Robert, 2017. "Slotting allowances and retail product variety under oligopoly," Economics Letters, Elsevier, vol. 158(C), pages 34-36.
    9. Roman Inderst & Greg Shaffer, 2010. "Market-share contracts as facilitating practices," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 709-729.

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