Vertical Relations in the Presence of Competitive Recycling
Autor: | Liliane Giardino-Karlinger |
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Rok vydání: | 2015 |
Předmět: |
two-part tariffs
fidelity rebates business.industry market power Profit maximization Durable good vertical relations market power two-part tariffs fidelity rebates vertical relations Oligopoly Microeconomics Incentive Vertical restraints Bilateral monopoly Industrial relations Economics Market power business Industrial organization Downstream (petroleum industry) |
Zdroj: | Journal of Industry, Competition and Trade. 16:25-49 |
ISSN: | 1573-7012 1566-1679 |
Popis: | This paper studies the vertical relations between a manufacturer and one or more retailers over two periods in the presence of a competitive recycling sector. In a bilateral monopoly, two-part tariffs are always efficient, i.e. the manufacturer will produce the joint-profit-maximizing output. Under downstream oligopoly, instead, retailers compete to acquire the recycled good which allows the recycling sector to appropriate some of the industry profits. Under two-part tariffs, the manufacturer has an incentive to distort her output choices to reduce this rent loss: She will discriminate among her retailers, and she will either overproduce in the second period or underproduce in the first period. Vertical restraints that restore profit maximization (e.g. loyalty rebates) will harm consumers whenever the manufacturer would overproduce otherwise. |
Databáze: | OpenAIRE |
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