EconPapers    
Economics at your fingertips  
 

A manufacturer's incentive to open its direct channel and its impact on welfare

Noriaki Matsushima, Tomomichi Mizuno () and Cong Pan

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: We consider a bilateral monopoly in which a manufacturer can open its direct channel that is less efficient than the existing retailer. We find the following results. The manufacturer opens its direct channel if its bargaining power over the existing retailer is weak. Opening the direct channel is detrimental to social welfare if this channel is efficient. Under a linear demand specification, if the equilibrium unit price under such opening is higher than that under no opening, the opening reduces social welfare under most of the parameter range of the efficiency of the manufacturer's direct channel.

Date: 2018-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.iser.osaka-u.ac.jp/library/dp/2018/DP1026.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:dpr:wpaper:1026

Access Statistics for this paper

More papers in ISER Discussion Paper from Institute of Social and Economic Research, Osaka University Contact information at EDIRC.
Bibliographic data for series maintained by Fumiko Matsumoto ().

 
Page updated 2019-04-16
Handle: RePEc:dpr:wpaper:1026