Liberalizing a Distribution System: the European Car Market

Frank Verboven and Randy Brenkers

No 3622, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We quantify the competitive effects of removing vertical restraints, based on the recent proposals to liberalize the selective and exclusive distribution system in the European car market. We estimate a differentiated products demand system for new cars and specify a model of oligopoly pricing under the current distribution regime. We then perform several policy experiments: the creation of international intrabrand competition (cross-border trade) and a possible strengthening of national intrabrand competition. Our approach may also be useful to assess the competitive effects of vertical restraints in other applications.

Keywords: Vertical restraints; Selective and exclusive distribution; Competition policy; Car market (search for similar items in EconPapers)
JEL-codes: F00 L00 (search for similar items in EconPapers)
Date: 2002-10
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (2)

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Journal Article: Liberalizing A Distribution System: The European Car Market (2006)
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