Commitment to commercialization and quality choices in the Champagne wine producer-distributor relationship

Jacques-Alexandre Laye and Eric Giraud-Heraud
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Jacques-Alexandre Laye: LEF - Laboratoire d'Economie Forestière - INRA - Institut National de la Recherche Agronomique - AgroParisTech
Eric Giraud-Heraud: Alimentation et Sciences Sociales - INRA - Institut National de la Recherche Agronomique

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Abstract: We study the interaction in the Champagne wine producer/distributor relationship between the commitment of the producer to commercialization of a low quality wine and the high quality adjustment of the distributor. We show that this commitment can allow the producer to acquire all the pro t of the supply chain. However, at equilibrium, the distributor chooses a quality level that is superior to that obtained at the optimum of vertical integration, and manages to get a part of the pro t. The results we obtain allow us to analyze the evolution of wine supply chains when a new distributor appears and enters in competition with the producer.

Keywords: VERTICAL RELATIONSHIPS; QUALITY; WINE (search for similar items in EconPapers)
Date: 2011
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Published in Enometrica, 2011, 4 (1), n.p

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01000551

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