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Product Diversity in a Vertical Distribution Channel under Monopolistic Competition


  • Bykadorov Igor



In Russia the chain-stores gained a considerable market power. Our model combines a Dixit-Stiglitz industry with a monopolistic retailer. The questions addressed are: Does the retailer always deteriorate welfare, prices and variety of goods? Which market structure is worse: Nash or Stackelberg behavior? What should be the public policy in this area?

Suggested Citation

  • Bykadorov Igor, 2010. "Product Diversity in a Vertical Distribution Channel under Monopolistic Competition," EERC Working Paper Series 10/03e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:10/03e

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    References listed on IDEAS

    1. Pierre-Philippe Combes & Thierry Mayer & Jacques-François Thisse, 2008. "Economic Geography: The Integration of Regions and Nations," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00311000, HAL.
    2. Dixit, Avinash, 1983. "Vertical integration in a monopolistically competitive industry," International Journal of Industrial Organization, Elsevier, vol. 1(1), pages 63-78, March.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Martin K. Perry & Robert H. Groff, 1985. "Resale Price Maintenance and Forward Integration into a Monopolistically Competitive Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1293-1311.
    5. Mathewson, G F & Winter, R A, 1983. "Vertical Integration by Contractual Restraints in Spatial Markets," The Journal of Business, University of Chicago Press, vol. 56(4), pages 497-517, October.
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising


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