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Private Labels, Price Rivalry, and Public Policy

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  • Gabrielsen, Tommy Staahl
  • Sørgard, Lars

Abstract

The article examines how the existence of a retailer owned brand, private label, aspects the price setting of a national brand. We …nd that the potential for a private label introduction may lead to price concessions from the national brand producer, but that actual private label introduction as such may very well lead to higher retail prices on national brands. We argue that this may have important implications for the interpretation of empirical results and the public policy towards national brands.

Suggested Citation

  • Gabrielsen, Tommy Staahl & Sørgard, Lars, 2000. "Private Labels, Price Rivalry, and Public Policy," University of California at Santa Barbara, Economics Working Paper Series qt8wh900ks, Department of Economics, UC Santa Barbara.
    • Handle: RePEc:cdl:ucsbec:qt8wh900ks
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    References listed on IDEAS

    as
    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 375-394.
    3. Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Exclusive versus Common Dealership," Southern Economic Journal, John Wiley & Sons, vol. 66(2), pages 353-366, October.
    4. repec:bla:scandj:v:101:y:1999:i:1:p:127-42 is not listed on IDEAS
    5. Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Discount Chains and Brand Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 127-142, March.
    6. Jagmohan S. Raju & Raj Sethuraman & Sanjay K. Dhar, 1995. "The Introduction and Performance of Store Brands," Management Science, INFORMS, vol. 41(6), pages 957-978, June.
    7. Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Exclusive versus Common Dealership," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 353-366, October.
    8. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 509-528, Fall.
    9. Dobson, Paul W & Waterson, Michael, 1997. "Countervailing Power and Consumer Prices," Economic Journal, Royal Economic Society, vol. 107(441), pages 418-430, March.
    10. Narasimhan, Chakravarthi & Wilcox, Ronald T, 1998. "Private Labels and the Channel Relationship: A Cross-Category Analysis," The Journal of Business, University of Chicago Press, vol. 71(4), pages 573-600, October.
    11. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
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    Citations

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    Cited by:

    1. Bontemps, C. & Orozco, V. & Réquillart, V., 2005. "Confirming the price effects of private labels development," Economics Working Paper Archive (Toulouse) 200506, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    2. Bontemps Christophe & Orozco Valerie & Réquillart Vincent & Trevisiol Audrey, 2005. "Price Effects of Private Label Development," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
    3. Liu, Xing & Niemi, Jyrki, 2014. "A New Balance of Power Between Suppliers and Retailers in Finland," 2014 International European Forum, February 17-21, 2014, Innsbruck-Igls, Austria 199060, International European Forum on System Dynamics and Innovation in Food Networks.
    4. Daniel Hassan & Sylvette Monier-Dilhan, 2006. "National brands and store brands: Competition through public quality labels," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 21-30.
    5. Bergès-Sennou Fabian & Bontems Philippe & Réquillart Vincent, 2004. "Economics of Private Labels: A Survey of Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-25, February.

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