IDEAS home Printed from https://ideas.repec.org/p/cor/louvrp/2428.html
   My bibliography  Save this paper

Product line choice in retail duopoly

Author

Listed:
  • MONER_COLONQUES, Rafael
  • SEMPERE-MONERRIS, José J.
  • URBANo, Amparo

Abstract

This paper develops a successive duopoly model to identify conditions under which differentiated retailers that compete in quantities, when deciding on the range of brands to offer, will carry overlapping product lines. They will do so when retail margins on each brand are not too asymmetric. Otherwise, the less profitable brand is foreclosed from the market. It is shown that welfare increases if the upstream industry is perfectly competitive, even though fewer brands may be sold. With price competition though, exclusive dealing arises when retailers are not too differentiated and in‐store competition is sufficiently intense.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • MONER_COLONQUES, Rafael & SEMPERE-MONERRIS, José J. & URBANo, Amparo, 2011. "Product line choice in retail duopoly," LIDAM Reprints CORE 2428, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2428
    DOI: 10.1111/j.1530-9134.2011.00305.x
    Note: In : Journal of Economics & Management Strategy, 20(3), 777-802, 2011
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gilbert, Richard J & Matutes, Carmen, 1993. "Product Line Rivalry with Brand Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 41(3), pages 223-240, September.
    2. Avner Shaked & John Sutton, 1990. "Multiproduct Firms and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 45-62, Spring.
    3. Shaffer, Greg, 1991. "Capturing Strategic Rent: Full-Line Forcing, Brand Discounts, Aggregate Rebates, and Maximum Resale Price Maintenance," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 557-575, September.
    4. Lin, Y Joseph, 1990. "The Dampening-of-Competition Effect of Exclusive Dealing," Journal of Industrial Economics, Wiley Blackwell, vol. 39(2), pages 209-223, December.
    5. De Fraja, Giovanni, 1993. "Relaxing spatial competition through product line choice (or vice versa)," Regional Science and Urban Economics, Elsevier, vol. 23(4), pages 461-486, September.
    6. Andreas Irmen, 1998. "Precommitment in Competing Vertical Chains," Journal of Economic Surveys, Wiley Blackwell, vol. 12(4), pages 333-359, September.
    7. O'Brien, Daniel P & Shaffer, Greg, 1993. "On the Dampening-of-Competition Effect of Exclusive Dealing," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 215-221, June.
    8. Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Discount Chains and Brand Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 127-142, March.
    9. Vrinda Kadiyali & Pradeep Chintagunta & Naufel Vilcassim, 2000. "Manufacturer-Retailer Channel Interactions and Implications for Channel Power: An Empirical Investigation of Pricing in a Local Market," Marketing Science, INFORMS, vol. 19(2), pages 127-148, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MANEZ, Juan A. & MONER-COLONQUES, Rafael & SEMPERE-MONERRIS, José J. & URBANO, Amparo, 2011. "Price differentials among brands in retail distribution: product quality and service quality," LIDAM Discussion Papers CORE 2011017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Chrysovalantou Milliou & Joel Sandonis, 2018. "Manufacturer Mergers and Product Variety in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 1-24, March.
    3. Levent Kutlu & Alper Nakkas, 2018. "Strategic Product Line Choice Under Asymmetric Demand Structure," The Japanese Economic Review, Springer, vol. 69(3), pages 347-359, September.
    4. Kangsik Choi, 2022. "Delegation in multiproduct downstream firms with heterogeneous channels," Journal of Economics, Springer, vol. 135(1), pages 75-102, January.
    5. Cong Pan, 2016. "Retailer’s product line choice with manufacturer’s multichannel marketing," ISER Discussion Paper 0976, Institute of Social and Economic Research, Osaka University.
    6. Ramon Fauli‐Oller & Joel Sandonís, 2021. "Buyer power, product assortment and asymmetric retail formats," Bulletin of Economic Research, Wiley Blackwell, vol. 73(2), pages 196-211, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chrysovalantou Milliou & Joel Sandonis, 2018. "Manufacturer Mergers and Product Variety in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 1-24, March.
    2. Gabrielsen, Tommy Staahl, 1997. "Equilibrium retail distribution systems," International Journal of Industrial Organization, Elsevier, vol. 16(1), pages 105-120, November.
    3. Andrew Rhodes & Jidong Zhou, 2019. "Consumer Search and Retail Market Structure," Management Science, INFORMS, vol. 67(6), pages 2607-2623, June.
    4. Tommy Staahl Gabrielsen & Lars Sørgard, 1999. "Exclusive versus Common Dealership," Southern Economic Journal, John Wiley & Sons, vol. 66(2), pages 353-366, October.
    5. A. Yeşim Orhun & Sriram Venkataraman & Pradeep K. Chintagunta, 2016. "Impact of Competition on Product Decisions: Movie Choices of Exhibitors," Marketing Science, INFORMS, vol. 35(1), pages 73-92, January.
    6. Thorsten Posselt, 1999. "Ausschließlichkeitsbindungen als Anreiz zum Handelsmarketing — Eine Untersuchung zur Gestaltung von Distributionssystemen," Schmalenbach Journal of Business Research, Springer, vol. 51(4), pages 350-376, April.
    7. Manez, J.A. & Waterson, M., 2001. "Multiproduct Firms and Product Differentiation: a Survey," The Warwick Economics Research Paper Series (TWERPS) 594, University of Warwick, Department of Economics.
    8. Markus Reisinger & Tim Paul Thomes, 2017. "Manufacturer collusion: Strategic implications of the channel structure," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 923-954, December.
    9. Aguirre, Inaki & Espinosa, Maria Paz & Macho-Stadler, Ines, 1998. "Strategic entry deterrence through spatial price discrimination," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 297-314, May.
    10. Bian, Junsong & Zhao, Xuan & Liu, Yunchuan, 2020. "Single vs. cross distribution channels with manufacturers’ dynamic tacit collusion," International Journal of Production Economics, Elsevier, vol. 220(C).
    11. Upender Subramanian & Jagmohan S. Raju & Z. John Zhang, 2013. "Exclusive Handset Arrangements in the Wireless Industry: A Competitive Analysis," Marketing Science, INFORMS, vol. 32(2), pages 246-270, March.
    12. Ramon Fauli‐Oller & Joel Sandonís, 2021. "Buyer power, product assortment and asymmetric retail formats," Bulletin of Economic Research, Wiley Blackwell, vol. 73(2), pages 196-211, April.
    13. Gabrielsen, Tommy Staahl & Sorgard, Lars, 2007. "Private labels, price rivalry, and public policy," European Economic Review, Elsevier, vol. 51(2), pages 403-424, February.
    14. repec:bla:jecsur:v:12:y:1998:i:4:p:333-59 is not listed on IDEAS
    15. Cong Pan, 2016. "Retailer’s product line choice with manufacturer’s multichannel marketing," ISER Discussion Paper 0976, Institute of Social and Economic Research, Osaka University.
    16. Aditya Bhattacharjea & Srishti Gupta, 2022. "Alternative Forms of Buyer Power in a Vertical Duopoly: Implications for profits and consumer welfare," Working papers 326, Centre for Development Economics, Delhi School of Economics.
    17. Aditya Bhattacharjea & Srishti Gupta, 2024. "Alternative forms of buyer power in a vertical duopoly: implications for profits, welfare, and cost pass-through," Journal of Economics, Springer, vol. 142(2), pages 163-198, July.
    18. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    19. Ziss, Steffen, 2007. "Hierarchies, intra-firm competition and mergers," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 237-260, April.
    20. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano, 2001. "Equilibrium Distribution Systems Under Retailers' Strategic Behavior," Working Papers. Serie AD 2001-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    21. Mauleon, Ana & Sempere-Monerris, Jose J. & Vannetelbosch, Vincent J., 2011. "Networks of manufacturers and retailers," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 351-367, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvrp:2428. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.