Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148203
Authors: 
Pan, Cong
Year of Publication: 
2016
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 976
Abstract: 
This paper studies how a retailer decides the length of product line in a vertically related industry. We study a market with two product varieties. Each retailer decides the number of varieties it procures from an upstream manufacturer. The manufacturer may open an online store and encroach on the resale market. In the case of a monopoly retailer, anticipating the online store's encroachment, the retailer may be willing to shorten its product line, although it can choose a full-length one. In the case of duopoly retailers, on the other hand, retailers may make their product lines completely overlapped, partially overlapped, or non-overlapped. Moreover, the total surplus may decrease due to the efficiency loss in the online channel, although the competition in the resale market becomes more intense.
Subjects: 
channels of distribution
encroachment
buyer power
product line choice
JEL: 
L14
L22
M11
Document Type: 
Working Paper

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