Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197699
Authors: 
Matsushimay, Noriaki
Mizunoz, Tomomichi
Pan, Cong
Year of Publication: 
2018
Series/Report no.: 
ISER Discussion Paper No. 1026
Abstract: 
We consider a bilateral monopoly in which a manufacturer can open its direct channel that is less efficient than the existing retailer. We find the following results. The manufacturer opens its direct channel if its bargaining power over the existing retailer is weak. Opening the direct channel is detrimental to social welfare if this channel is efficient. Under a linear demand specification, if the equilibrium unit price under such opening is higher than that under no opening, the opening reduces social welfare under most of the parameter range of the efficiency of the manufacturer's direct channel.
Subjects: 
distribution channels
supplier encroachment
two-part tariff contract
welfare
JEL: 
L14
L22
M11
D43
Document Type: 
Working Paper

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