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The Impact of Upfront Payments on Assortment Decisions in Retailing

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  • Pio Baake
  • Vanessa Schlippenbach

Abstract

There is a contentious debate about the exclusionary effects of upfront payments to be made by manufacturers to place their products on retailers’ shelves. Analyzing a two-stage bargaining process with one downstream retailer and a pool of upstream manufacturers, we find that upfront payments lead to a smaller assortment if the retailer’s bargaining power is high enough and the suppliers’ products are close substitutes. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Pio Baake & Vanessa Schlippenbach, 2014. "The Impact of Upfront Payments on Assortment Decisions in Retailing," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(1), pages 95-111, February.
    • Handle: RePEc:kap:revind:v:44:y:2014:i:1:p:95-111
    DOI: 10.1007/s11151-013-9407-7
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