Comment on “A Comparison of the Wholesale Model and the Agency Model in Differentiated Markets”

Kangsik Choi and Seonyoung Lim ()
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Kangsik Choi: Pusan National University
Seonyoung Lim: Mokpo National University

Review of Industrial Organization, 2022, vol. 61, issue 3, No 7, 373-377

Abstract: Abstract We revisit the wholesale model and the agency model in differentiated markets of Lu (Review of Industrial Organization, 51, 151–172, 2017) and show the changes of the equilibrium outcomes of consumer surplus and social welfare. Unlike Lu (Review of Industrial Organization, 51, 151–172, 2017), we find that: (i) social welfare is always greater in agency model than in wholesale model; and (ii) different rankings of equilibrium aggregate profits and social welfare are obtained under the two models.

Keywords: Agency model; Wholesale model; Social welfare; Consumer surplus (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11151-022-09871-0

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