Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27317
Authors: 
Baake, Pio
von Schlippenbach, Vanessa
Year of Publication: 
2008
Series/Report no.: 
Discussion papers // German Institute for Economic Research 793
Abstract: 
We analyze the listing decisions of a retailer who may ask her suppliers to make upfront payments in order to be listed. We consider a sequential game with upfront payments being negotiated before short-term delivery contracts. We show that the retailer is more likely to use upfront payments the higher her bargaining power and the higher the number of potential suppliers. Upfront payments tend to lower the number of products offered by the retailer when the products are rather close substitutes. However, upfront payments can increase social welfare if they ameliorate inefficient listing decisions implied by short-term contracts only.
Subjects: 
Buyer power
upfront payments
retailing
JEL: 
L14
L42
Document Type: 
Working Paper

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