Retail channel management in consumer search markets
- Author(s)
- Daniel Garcia, Maarten Janssen
- Abstract
We study how a monopoly manufacturer optimally manages her contractual relations with retailers in markets with consumer search. By choosing wholesale prices, the manufacturer affects the degree of competition between retailers and the incentives of consumers to search. We show that depending on whether or not the manufacturer can commit to her price decisions and on the search cost, the manufacturer may be substantially better off choosing her wholesale prices not independent of each other, consciously allowing for asymmetric contracts. Thus, our analysis may shed light on when we may expect sales across different retailers to be positively or negatively correlated. Our model may be able to generate loss leaders at the wholesale level and show the rationale for creating “premium resellers”.
- Organisation(s)
- Department of Economics
- External organisation(s)
- National Research University
- Journal
- International Journal of Industrial Organization
- Volume
- 58
- Pages
- 162-182
- No. of pages
- 21
- ISSN
- 0167-7187
- DOI
- https://doi.org/10.1016/j.ijindorg.2017.05.004
- Publication date
- 05-2018
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics
- Keywords
- ASJC Scopus subject areas
- Aerospace Engineering, Economics and Econometrics, Economics, Econometrics and Finance (miscellaneous), Industrial relations, Industrial and Manufacturing Engineering, Strategy and Management
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/retail-channel-management-in-consumer-search-markets(8cb1937f-8c85-4911-8975-aac5033804b6).html