Slotting Allowances and Resale Price Maintenance: A Comparison of Facilitating Practices

Greg Shaffer

RAND Journal of Economics, 1991, vol. 22, issue 1, 120-135

Abstract: Producers in a perfectly competitive industry compete to obtain shelf space at the retail level. Barring contract observability problems, slotting allowances are observed in equilibrium. Producers charge a high wholesale price, but they give back their profits via up-front payments to retailers. However, if the individual supplier-retailer wholesale price terms are unobservable by competitors, then resale price maintenance will be seen, but the coverage will not be universal. The equilibria can be ranked by the usual social welfare criteria. Resale price maintenance, though worse than simple marginal cost wholesale pricing, yields greater surplus than the slotting allowance equilibrium.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (124)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819912 ... O%3B2-V&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:rje:randje:v:22:y:1991:i:spring:p:120-135

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().