Fair Pricing, Upstream Market Power, and Vertical Restraint

Stephen Hamilton () and Benjamin Ouvrard ()
Additional contact information
Stephen Hamilton: Department of Economics, California Polytechnic State University
Benjamin Ouvrard: Grenoble Applied Economics Laboratory

No 2402, Working Papers from California Polytechnic State University, Department of Economics

Abstract: Fair pricing standards are used in various industries, encompassing fair trade, labor practices, and state-regulated pricing. We demonstrate that fair pricing can serve as a vertical restraint by a dominant manufacturer on its retailers to fully coordinating prices in a multi-product distribution channel with fair priced and conventional goods. We identify buyer market power by the manufacturer in the upstream market as a novel role for a manufacturer to impose a vertical restraint on retailers in the downstream market, and characterize the vertical restraint that maximizes collective rents in terms of demand-side and supply-side diversion ratios.

Keywords: Fair pricing; vertical restraint; buyer market power (search for similar items in EconPapers)
JEL-codes: D43 L13 L14 L42 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024
New Economics Papers: this item is included in nep-com, nep-des, nep-hme, nep-mic and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://drive.google.com/file/d/1r46cMnplNvLgL7QVX ... /view?usp=drive_link First version, 2024 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpl:wpaper:2402

Access Statistics for this paper

More papers in Working Papers from California Polytechnic State University, Department of Economics
Bibliographic data for series maintained by Matthew Cole ().