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Comment on “A Comparison of the Wholesale Model and the Agency Model in Differentiated Markets”

Author

Listed:
  • Kangsik Choi

    (Pusan National University)

  • Seonyoung Lim

    (Mokpo National University)

Abstract

We revisit the wholesale model and the agency model in differentiated markets of Lu (Review of Industrial Organization, 51, 151–172, 2017) and show the changes of the equilibrium outcomes of consumer surplus and social welfare. Unlike Lu (Review of Industrial Organization, 51, 151–172, 2017), we find that: (i) social welfare is always greater in agency model than in wholesale model; and (ii) different rankings of equilibrium aggregate profits and social welfare are obtained under the two models.

Suggested Citation

  • Kangsik Choi & Seonyoung Lim, 2022. "Comment on “A Comparison of the Wholesale Model and the Agency Model in Differentiated Markets”," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 61(3), pages 373-377, November.
    • Handle: RePEc:kap:revind:v:61:y:2022:i:3:d:10.1007_s11151-022-09871-0
    DOI: 10.1007/s11151-022-09871-0
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    References listed on IDEAS

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    1. Liang Lu, 2017. "A Comparison of the Wholesale Model and the Agency Model in Differentiated Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(2), pages 151-172, September.
    2. Choné, Philippe & Linnemer, Laurent, 2020. "Linear demand systems for differentiated goods: Overview and user’s guide," International Journal of Industrial Organization, Elsevier, vol. 73(C).
    3. Dobson, Paul W. & Waterson, Michael, 2007. "The competition effects of industry-wide vertical price fixing in bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 935-962, October.
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