IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/3622.html
   My bibliography  Save this paper

Liberalizing a Distribution System: the European Car Market

Author

Listed:
  • Verboven, Frank
  • Brenkers, Randy

Abstract

We quantify the competitive effects of removing vertical restraints, based on the recent proposals to liberalize the selective and exclusive distribution system in the European car market. We estimate a differentiated products demand system for new cars and specify a model of oligopoly pricing under the current distribution regime. We then perform several policy experiments: the creation of international intrabrand competition (cross-border trade) and a possible strengthening of national intrabrand competition. Our approach may also be useful to assess the competitive effects of vertical restraints in other applications.

Suggested Citation

  • Verboven, Frank & Brenkers, Randy, 2002. "Liberalizing a Distribution System: the European Car Market," CEPR Discussion Papers 3622, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3622
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP3622
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Xiao, Junji & Ju, Heng, 2016. "The determinants of dealership structure: Empirical analysis of the Chinese auto market," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 961-981.
    2. Hellerstein, Rebecca & Villas-Boas, Sofia B., 2010. "Outsourcing and pass-through," Journal of International Economics, Elsevier, vol. 81(2), pages 170-183, July.
    3. Laura Grigolon & Frank Verboven, 2014. "Nested Logit or Random Coefficients Logit? A Comparison of Alternative Discrete Choice Models of Product Differentiation," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 916-935, December.
    4. Noton, Carlos, 2016. "Structural estimation of price adjustment costs in the European car market," International Journal of Industrial Organization, Elsevier, vol. 49(C), pages 105-147.
    5. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    6. Jorge, Sí­lvia Ferreira & Pires, Cesaltina Pacheco, 2008. "Delivered versus mill nonlinear pricing with endogenous market structure," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 829-845, May.
    7. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, January.
    8. Tran, Tat Thanh & Zikos, Vasileios, 2017. "R&D networks among suppliers and manufacturers," Economic Modelling, Elsevier, vol. 60(C), pages 151-161.
    9. A. Auer, Raphael & Chaney, Thomas & Sauré, Philip, 2018. "Quality pricing-to-market," Journal of International Economics, Elsevier, vol. 110(C), pages 87-102.
    10. Fadairo, Muriel & Yu, Jianyu & Lanchimba, Cintya, 2017. "The Choice of Exclusive Dealing: Economic Rationales and Evidence from French Retail Chains," Journal of Retailing, Elsevier, vol. 93(3), pages 317-335.
    11. Milliou, Chrysovalantou & Petrakis, Emmanuel, 2007. "Upstream horizontal mergers, vertical contracts, and bargaining," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 963-987, October.
    12. Verboven, Frank & Bourreau, Marc & Sun, Yutec, 2018. "Market Entry, Fighting Brands and Tacit Collusion: The Case of the French Mobile Telecommunications Market," CEPR Discussion Papers 12866, C.E.P.R. Discussion Papers.
    13. Chenyu Yang, 2017. "Could Vertical Integration Increase Innovation?," 2017 Meeting Papers 908, Society for Economic Dynamics.
    14. Chu, Junhong, 2013. "Quantifying nation equity with sales data: A structural approach," International Journal of Research in Marketing, Elsevier, vol. 30(1), pages 19-35.
    15. Murry, Charles, 2018. "The effect of retail competition on relationship-specific investments: evidence from new car advertising," International Journal of Industrial Organization, Elsevier, vol. 59(C), pages 253-281.
    16. Auer, Raphael A., 2017. "Product heterogeneity, cross-country taste differences, and the growth of world trade," European Economic Review, Elsevier, vol. 100(C), pages 1-27.
    17. André de Palma & Julien Monardo, 2017. "The General Nesting Logit (GNL) Model using Aggregate Data," Working Papers hal-01552455, HAL.
    18. Slade, Margaret E., 2006. "Merger Simulations of Unilateral Effects : What Can We Learn from the UK Brewing Industry?," The Warwick Economics Research Paper Series (TWERPS) 767, University of Warwick, Department of Economics.
    19. González, Eduardo & Cárcaba, Ana & Ventura, Juan, 2015. "How car dealers adjust prices to reach the product efficiency frontier in the Spanish automobile market," Omega, Elsevier, vol. 51(C), pages 38-48.
    20. Herbert Dawid & Gerd Muehlheusser, 2019. "Smart products: liability, timing of market introduction, and investments in product safety," CESifo Working Paper Series 7673, CESifo.
    21. Rickert, Dennis, 2016. "Consumer state dependence, switching costs, and forward-looking producers. A dynamic discrete choice model applied to the diaper market," VfS Annual Conference 2016 (Augsburg): Demographic Change 145672, Verein für Socialpolitik / German Economic Association.
    22. Adachi, Takanori & Ebina, Takeshi, 2014. "Double marginalization and cost pass-through: Weyl–Fabinger and Cowan meet Spengler and Bresnahan–Reiss," Economics Letters, Elsevier, vol. 122(2), pages 170-175.
    23. Doi, Naoshi, 2022. "A simple method to estimate discrete-type random coefficients logit models," International Journal of Industrial Organization, Elsevier, vol. 81(C).

    More about this item

    Keywords

    Vertical restraints; Selective and exclusive distribution; Competition policy; Car market;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • L00 - Industrial Organization - - General - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cpr:ceprdp:3622. 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: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    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.