Will managerial delegation impede upstream collusion?

Leonard F. S. Wang and Han Wang ()
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Leonard F. S. Wang: Zhongnan University of Economics and Law
Han Wang: The Ohio State University

Journal of Economics, 2021, vol. 134, issue 2, No 2, 127-146

Abstract: Abstract We investigate the collusive incentive for far-sighted manufacturers selling via managerial retailers. In contrast to the existing literature, we find that revenue delegation can impede upstream collusion in Bertrand models. This happens due to market exit in the deviation phase when products are close substitutes. The result of managerial delegation hindering upstream collusion is robust if we allow manufacturers to consider partial collusion. Furthermore, we show that less intensified downstream competition does not always harm consumers. If upstream collusion is less sustainable with managerial retailers, consumers can be better-off.

Keywords: Collusion; Delegation; Price competition; Vertical channel (search for similar items in EconPapers)
JEL-codes: D2 L2 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:134:y:2021:i:2:d:10.1007_s00712-021-00741-z

DOI: 10.1007/s00712-021-00741-z

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