Secret contracting in multilateral relations

Patrick Rey and Thibaud Vergé

No 16-744, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We develop a general, tractable framework of multilateral vertical contracting, which places no restriction on tari§s and fully accounts for their impact on downstream competition. Equilibrium tariffs are cost-based and replicate the outcome of a multi-brand oligopoly, a finding in line with the analysis of a recent merger. We provide a micro-foundation for this framework, before analyzing the effect of RPM and price parity provisions, and of resale vs. agency business models. Finally, we extend the framework to endogenize the distribution network; we also consider mergers and show that their impact on the distribution network can dominate price effects

Keywords: Bilateral contracting; vertical relationships; agency; resale price maintenance; price parity clauses (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 L42 (search for similar items in EconPapers)
Date: 2016-12, Revised 2020-12
New Economics Papers: this item is included in nep-com, nep-cta, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/by/rey/secret.pdf 2019 version (application/pdf)

Related works:
Working Paper: Secret contracting in multilateral relations (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:31289

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