Product line choice in retail duopoly
(2011) Journal of Economics & Management Strategy —
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- Authors
- 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.
- Affiliations
University of Valencia Department of Economic Analysis and ERI-CES University of Valancia Department of Economic Analysis and ERI-CES
Citations
Moner-Colonques, R., Sempere Monerris, J. J., & Urbano, A. (2011). Product line choice in retail duopoly. Journal of Economics & Management Strategy. https://doi.org/10.1111/j.1530-9134.2011.00305.x