Economics at your fingertips  

Product Design and Decision Rights in Vertical Structures

Pierre Dubois () and Bruno Jullien ()

No 16-730, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: The paper argues that the emergence of private labels can be partially explained by the new information technologies available at the retail level. In our approach, the owner of a brand has ìdecision rightsîon product design, while the details of the production and distribution are left to contractual negotiation. Manufacturers have privileged information about the cost of improving quality, while distributors have private information on the impact of quality on demand. We show that ownership of the brand should be allocated to the party with a relative informational advantage. In particular, if the information of the distributor improves due to a technological shock on data collection and information management, it may become optimal for the distributor to introduce its own brand, rather than to distribute a manufacturerís brand.

Keywords: store brand; private label; asymmetric information; vertical structures; product design; decision rights (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-ind and nep-mkt
Date: 2016-11
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... /2016/wp_tse_730.pdf Full text (application/pdf)

Related works:
Journal Article: Product design and decision rights in vertical structures (2016) Downloads
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:

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2019-12-07
Handle: RePEc:tse:wpaper:4832