Controlling opportunism in vertical contracting when production precedes sales

A-Tier
Journal: RAND Journal of Economics
Year: 2015
Volume: 46
Issue: 3
Pages: 650-670

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

type="main"> <p>In a make-to-stock vertical contracting setting with private contracts, when retailers do not observe each other's stocks before choosing their prices, an opportunism problem always exist in contract equilibria but public market-wide Resale Price Maintenance (RPM) can restore monopoly power. However other widely used tools which do not fall under antitrust scrutiny and require only private bilateral contracts, such as buyback contracts, also allow the producer to fully exercise his monopoly power. We conclude that a more lenient policy toward RPM is unlikely to affect the producer's ability to control opportunism.

Technical Details

RePEc Handle
repec:bla:randje:v:46:y:2015:i:3:p:650-670
Journal Field
Industrial Organization
Author Count
1
Added to Database
2026-01-26