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Upstream collusion and downstream managerial incentives

Junsong Bian, Kin Keung Lai and Zhongsheng Hua

Economics Letters, 2013, vol. 118, issue 1, 97-100

Abstract: We investigate the effects of downstream firms’ managerial incentives on upstream collusion. Downstream profit-and-revenue incentive schemes make upstream manufacturers easier to collude than a pure-profit incentive scheme does when retailers compete in prices. However, the opposite occurs under quantity competition.

Keywords: Collusion; Incentive; Vertical channel; Price and quantity competition (search for similar items in EconPapers)
JEL-codes: D2 L2 (search for similar items in EconPapers)
Date: 2013
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Handle: RePEc:eee:ecolet:v:118:y:2013:i:1:p:97-100