The Theory of Price Collars: The Linking of Prices in a Market Channel to Redress the Exercise of Market Power
The marketing channels for many goods involve the production of a raw commodity that is processed and then distributed to retailers for sale to consumers. Either the processing industry or the retailing industry or both may exercise substantial market power ultimately against raw commodity suppliers or consumers, the disorganized (competitive) economic groups at the ends of the market channel. This paper develops a theory of price collars to regulate pricing in such a channel. Price collars link raw product, wholesale and retail prices but do not explicitly set such prices. For example, a wholesale price collar could limit the wholesale price to 140% of the raw commodity price, and a retail price collar could limit retail price to 130% of the wholesale price.
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| Length: | 23 pages |
| Date of creation: | Apr 2004 |
| Handle: | RePEc:zwi:fpcrep:091 |
| Contact details of provider: | Postal: 1376 Storrs Road, U-21, Storrs, Connecticut 06269-4021 Phone: 860-486-2836 Fax: 860-486-1932 Web page: http://www.zwickcenter.uconn.edu Email: More information through EDIRC
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- S. Chan Choi, 1991. "Price Competition in a Channel Structure with a Common Retailer," Marketing Science, INFORMS, vol. 10(4), pages 271-296.
- Slade, Margaret E, 1995. "Product Rivalry with Multiple Strategic Weapons: An Analysis of Price and Advertising Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 445-476, Fall.
- Cotterill, Ronald W. & Dhar, Tirtha Pratim, 2003.
"Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel,"
Research Reports
25189, University of Connecticut, Food Marketing Policy Center.
- Ronald W. Cotterill & Tirtha Pratim Dhar, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Food Marketing Policy Center Research Reports 074, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
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