IDEAS home Printed from https://ideas.repec.org/p/cpl/wpaper/2402.html
   My bibliography  Save this paper

Fair Pricing, Upstream Market Power, and Vertical Restraint

Author

Listed:
  • Stephen F. Hamilton

    (Department of Economics, California Polytechnic State University)

  • Benjamin Ouvrard

    (Grenoble Applied Economics Laboratory)

Abstract

Fair pricing standards are used in various industries, encompassing fair trade, labor practices, and state-regulated pricing. We demonstrate that fair pricing can serve as a vertical restraint by a dominant manufacturer on its retailers to fully coordinating prices in a multi-product distribution channel with fair priced and conventional goods. We identify buyer market power by the manufacturer in the upstream market as a novel role for a manufacturer to impose a vertical restraint on retailers in the downstream market, and characterize the vertical restraint that maximizes collective rents in terms of demand-side and supply-side diversion ratios.

Suggested Citation

  • Stephen F. Hamilton & Benjamin Ouvrard, 2024. "Fair Pricing, Upstream Market Power, and Vertical Restraint," Working Papers 2402, California Polytechnic State University, Department of Economics.
    • Handle: RePEc:cpl:wpaper:2402
    as

    Download full text from publisher

    File URL: https://drive.google.com/file/d/1r46cMnplNvLgL7QVXH5q3Erua02uo9OK/view?usp=drive_link
    File Function: First version, 2024
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Fair pricing; vertical restraint; buyer market power;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

    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:cpl:wpaper:2402. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Matthew Cole (email available below). General contact details of provider: https://edirc.repec.org/data/decplus.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.