Delegated Sales, Agency Costs and the Competitive Effects of List Price

Enrique Andreu, Damien Neven and Salvatore Piccolo (salvapiccolo@gmail.com)
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Enrique Andreu: Compass Lexecon

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We propose a simple agency framework in which although competing producers always find it optimal to share information about their list (undiscounted) prices, consumers are not necessarily harmed by these agreements. In particular, when sales are delegated to self-interested parties (such as salesmen or retailers), we find that expected discounts are higher with than without information sharing if and only if agency costs are sufficiently low. This shows that agreements according to which firms disclose list prices to their competitors should be presumed neither as anti-competitive nor as pro-competitive.

Keywords: Agency Costs; Consumer Welfare; Information Sharing; List Prices (search for similar items in EconPapers)
JEL-codes: L42 L50 L81 (search for similar items in EconPapers)
Date: 2020-07-27
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (3)

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