Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92842
Authors: 
Matsushima, Noriaki
Miyaoka, Akira
Year of Publication: 
2013
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 875
Abstract: 
We investigate the effect of banning resale-below-cost offers. There are two retailers with heterogeneous bargaining positions in relation to a monopolistic manufacturer. Each retailer sells two goods: one procured from the monopolistic manufacturer and the other, from a competitive fringe. In equilibrium, banning resale-below-cost offers can decrease the retailers' prices. The ban can benefit the weak retailer in terms of bargaining position and increase the total consumer surplus, although it harms the dominant retailer and the monopolistic manufacturer. Contrary to the basic scenario, when the weak retailer is horizontally separated, the ban benefits the monopolistic manufacturer
Subjects: 
Loss-leader Pricing
Channel Power
Vertical Relations
JEL: 
L13
L41
M38
D21
Document Type: 
Working Paper

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