Wholesale Pricing with Incomplete Information about Private Label Products

This article provides a theoretical model analyzing wholesale pricing tariffs set by a monopolistic manufacturer for its branded product that is sold to final customers by a monopolistic retailer. The bargaining power of the downstream retailer is strengthened by offering also a vertically diffe...

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Detalles Bibliográficos
Publicado en:MAGKS - Joint Discussion Paper Series in Economics (Band 36-2017)
Autor principal: Paha, Johannes
Formato: Artículo
Lenguaje:inglés
Publicado: Philipps-Universität Marburg 2017
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Acceso en línea:Texto Completo PDF
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Sumario:This article provides a theoretical model analyzing wholesale pricing tariffs set by a monopolistic manufacturer for its branded product that is sold to final customers by a monopolistic retailer. The bargaining power of the downstream retailer is strengthened by offering also a vertically differentiated private label product whose production costs are known only incompletely to the upstream manufacturer. The model shows that the manufacturer can avoid double marginalization and implement the full information outcome by combining a quantity discount with a market-share discount where only a retailer with a strong private label retroactively receives an allowance. Under these circumstances it is unprofitable for the manufacturer to impose exclusive dealing on the retailer.
Descripción Física:37 Seiten
ISSN:1867-3678
DOI:10.17192/es2024.0471