"When Should Manufacturers Want Fair Trade?": New Insights from Asymmetric Information when Supply Chains Compete

Jakub Kastl, David Martimort and Salvatore Piccolo ()

Post-Print from HAL

Abstract: We study a model of competing manufacturer/retailer pairs where adverse selection and moral hazard are coupled with promotional externalities at the downstream level. In contrast to earlier models mainly focusing on a bilateral monopoly setting, we show that with competing brands a 'laissez-faire' approach towards vertical price control might not always promote productive efficiency. Giving manufacturers freedom to control retail prices is more likely to harm consumers when retailers impose positive promotional externalities on each other, and the converse is true otherwise. Our simple model also suggests that, with competing supply chains, consumers and manufacturers might prefer different contractual modes if promotional externalities have substantial effects on demands.

Date: 2011-10
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published in Journal of Economics and Management Strategy, 2011, 20 (3), pp.649-677. ⟨10.1111/j.1530-9134.2011.00300.x⟩

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

Related works:
Journal Article: “When Should Manufacturers Want Fair Trade?”: New Insights from Asymmetric Information when Supply Chains Compete (2011)
Working Paper: "When Should Manufacturers Want Fair Trade?": New Insights from Asymmetric Information when Supply Chains Compete (2011)
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:halshs-00754510

DOI: 10.1111/j.1530-9134.2011.00300.x

Access Statistics for this paper

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