A Model of Vertical Restriction and Equilibrium in Retailing
Issue Date
1983-10Author
Bittlingmayer, George
Publisher
The University of Chicago Press
Type
Article
Article Version
Scholarly/refereed, publisher version
Published Version
http://www.jstor.org/stable/2352844Metadata
Show full item recordAbstract
This model of distribution provides a rationale for restrictions placed on retailers by manufacturers. The manufacturer's customers are located uniformly along a road, and retailing operations are subject to increasing returns. Three difficulties arise. First, retailers acting in concert can earn positive profits at the expense of the manufacturer and consumers. Second, costless relocation, free entry, and competition will not result in the store density and retail price favored by the manufacturer. Third, store locations fixed in the short run imply that price cutting would undermine the density of stores preferred by the manufacturer.
Description
The Journal of Business © 1983 The University of Chicago Press
Collections
Citation
Bittlingmayer, George (1983), "A Model of Vertical Restriction and Equilibrium in Retailing," he Journal of Business, 56 (4), 477-496
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