Vertical Relations in the Presence of Competitive Recycling
Liliane Giardino-Karlinger ()
Journal of Industry, Competition and Trade, 2016, vol. 16, issue 1, 25-49
Abstract This paper studies the vertical relations between a manufacturer and one or more retailers over two periods in the presence of a competitive recycling sector. In a bilateral monopoly, two-part tariffs are always efficient, i.e. the manufacturer will produce the joint-profit-maximizing output. Under downstream oligopoly, instead, retailers compete to acquire the recycled good which allows the recycling sector to appropriate some of the industry profits. Under two-part tariffs, the manufacturer has an incentive to distort her output choices to reduce this rent loss: She will discriminate among her retailers, and she will either overproduce in the second period or underproduce in the first period. Vertical restraints that restore profit maximization (e.g. loyalty rebates) will harm consumers whenever the manufacturer would overproduce otherwise.
Keywords: Vertical relations; Durable good; Downstream competition (search for similar items in EconPapers)
JEL-codes: L12 L14 L42 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10842-015-0200-1 Abstract (text/html)
Access to full text is restricted to subscribers.
Journal Article: Vertical Relations in the Presence of Competitive Recycling (2016)
Working Paper: Vertical Relations in the Presence of Competitive Recycling (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jincot:v:16:y:2016:i:1:d:10.1007_s10842-015-0200-1
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/10842/PS2
Access Statistics for this article
Journal of Industry, Competition and Trade is currently edited by Karl Aiginger, Marcel Canoy and Michael Peneder
More articles in Journal of Industry, Competition and Trade from Springer
Series data maintained by Sonal Shukla ().