EconPapers    
Economics at your fingertips  
 

Decentralization and Consumer Welfare with Substitutes or Complements

Nicolas Pasquier ()
Additional contact information
Nicolas Pasquier: UB - Université de Bordeaux, GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes

Post-Print from HAL

Abstract: We study a vertically integrated producer (VIP) that supplies a downstream firm under price competition. The VIP may decentralize the final price decision to its downstream unit; the latter thereby ignores the effect of the output price on upstream sales. We find that decentralization benefits the VIP - irrespective of whether the products are substitutes or complements. Decentralization also benefits the consumers when products are substitutes, but it harms them when the products are complements. Interestingly, when products are substitutes, decentralization decreases both output prices despite restoring a double margin on the downstream unit's sales.

Keywords: Decentralization; Substitutes; Complements (search for similar items in EconPapers)
Date: 2024-01-15
References: Add references at CitEc
Citations:

Published in Review of Industrial Organization, 2024, ⟨10.1007/s11151-023-09941-x⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-04523424

DOI: 10.1007/s11151-023-09941-x

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-31
Handle: RePEc:hal:journl:hal-04523424