Vertical Restraints and Horizontal Control

Stephen F. Hamilton () and Robert Innes

No 21424, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper considers vertical restraints in a multi-market retail setting in which each retailer sells the complete line of manufactured goods. Vertical restraints by one manufacturer on the retailers of its product serve as an instrument to exert horizontal control over the retail price of a rival manufactured good. Applications are developed for supermarket retailing, where the manufacturer of a national brand sold at both supermarkets can employ vertical restraints to control the pricing of the retailer’'s competing private labels, and for the personal computer industry, where the manufacturer of an essential computer component can use vertical restraints to control the pricing of complementary components bundled with the essential component by original equipment manufacturers (OEMs).

Keywords: contracting; vertical restraints; monopolization.; Marketing; L13; L14; L42; D43. (search for similar items in EconPapers)
Date: 2006
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Journal Article: Vertical restraints and horizontal control (2009)
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