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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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  • 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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    Cited by:

    1. 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.
    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 & Innes, Robert, 2017. "Slotting allowances and retail product variety under oligopoly," Economics Letters, Elsevier, vol. 158(C), pages 34-36.
    4. Karp Larry S. & Perloff Jeffrey M., 2013. "Vertical Contracts and Mandatory Universal Distribution," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 595-626, October.
    5. Stéphane Caprice & Vanessa von 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.
    6. Sheldon, Ian M., 2017. "The Competitiveness Of Agricultural Product And Input Markets: A Review And Synthesis Of Recent Research," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(1), pages 1-44, February.
    7. Robert Innes & Stephen F. Hamilton, 2009. "Vertical restraints and horizontal control," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 120-143, March.
    8. Ian M. Sheldon, 2021. "Reflections on a Career as an Industrial Organization and International Economist," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 468-499, June.
    9. Roman Inderst & Greg Shaffer, 2010. "Market‐share contracts as facilitating practices," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 709-729, December.
    10. Iván Valdés de la Fuente & Gonzalo Escobar Elexpuru, 2022. "Is it rational for a large-retailer to sell an own-brand product similar to the branded product of a large manufacturer? A Vertical Product Differentiation Model," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 90(3), pages 77-109, February.
    11. 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.
    12. 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.
    13. Karp, Larry S. & Perloff, Jeffrey M., 2011. "The iPhone goes downstream: mandatory universal distribution," CUDARE Working Papers 123636, University of California, Berkeley, Department of Agricultural and Resource Economics.

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