Vertical Separation with Private Contracts

Pagnozzi, Marco; Piccolo, Salvatore

doi:10.1111/j.1468-0297.2011.02471.x

Cited by 40 publications

(23 citation statements)

References 24 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…These beliefs are such that a downstream player that receives an out of equilibrium o¤er believes that all other downstream players must have received the same out of equilibrium o¤er as well. If an upstream player in equilibrium was anticipated to o¤er x to all downstream players, a downstream player who receives an o¤er of y believes that the o¤ers to all other downstream players is also y: This selection criterion is used, among others, by Pagnozzi and Piccolo (24). However, most of the literature seems A third suggestion is to consider equilibria supported by wary beliefs.…”

Section: Introductionmentioning

confidence: 99%

Equilibrium Selection in Sequential Games with Imperfect Information

et al. 2013

View full text Add to dashboard Cite

Games with imperfect information often feature multiple equilibria, which depend on beliefs o¤ the equilibrium path. Standard selection criteria such as passive beliefs, symmetric beliefs or wary beliefs rest on ad hoc restrictions on beliefs. We propose a new selection criterion that imposes no restrictions on beliefs: we select the action pro…le that is supported in equilibrium by the largest set of beliefs. We conduct experiments to test the predictive power of the existing and our novel selection criteria in two applications: a game of vertical multi-lateral contracting, and a game of electoral competition. We …nd that our selection criterion outperforms the other selection criteria.

show abstract

Section: Introductionmentioning

confidence: 99%

Equilibrium Selection in Sequential Games with Imperfect Information

et al. 2013

View full text Add to dashboard Cite

show abstract

“… See Pagnozzi and Piccolo [] for an analysis of the role of beliefs when contracts between manufacturers and retailers are private. …”

mentioning

confidence: 99%

Entry and Product Variety with Competing Supply Chains

Pagnozzi¹,

Piccolo

Bassi

2016

The J Industrial Economics

Self Cite

View full text Add to dashboard Cite

We study a model where an endogenous number of competing manufacturers located around a circle contract with exclusive retailers who are privately informed about their costs. The number of brands in the market (determined by the manufacturers’ zero profit condition) depends on the presence of asymmetric information and on the types of contracts between manufacturers and retailers. With two‐part tariffs, wholesale prices fully reflect retailers’ costs; with linear contracts, wholesale prices are constant and independent of retailers’ costs. The number of brands is lower (resp. higher) with asymmetric information than with complete information when contracts are linear (resp. with two‐part tariffs). Moreover, although the number of brands is always higher with linear contracts than with two‐part tariffs, joint profits of manufacturers and retailers are higher with linear prices. We also discuss manufacturers’ incentives to choose different contract forms and analyze the effects of endogenous entry on welfare.

show abstract

“…Pagnozzi and Piccolo () show that this result also hinges on the assumption on retailers' conjectures about their rivals' contracts. For example, the result can be reverted if retailers hold symmetric conjectures instead of the commonly used passive conjectures.…”

mentioning

confidence: 91%

Manufacturer collusion: Strategic implications of the channel structure

Reisinger

Thomes

2017

Economics Manag Strategy

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor. Terms of use: Documents in AbstractWe investigate how the structure of the distribution channel affects tacit collusion between manufacturers. When selling through a common retailer, we find-in contrast to the conventional understanding of tacit collusion that firms act to maximize industry profits-that colluding manufacturers strategically induce double marginalization so that retail prices are above the monopoly level. This lowers industry profits but increases the profit share that manufacturers appropriate from the retailer. Comparing common distribution with independent (exclusive) distribution, we show that the latter facilitates collusion. Despite this result, common retailing leads to lower welfare because a common retailer monopolizes the downstream market. For the case of independent retailing, we also demonstrate that contract offers that are observable to the rival retailer are not necessarily beneficial for collusive purposes.

show abstract

Vertical Separation with Private Contracts

Cited by 40 publications

References 24 publications

Equilibrium Selection in Sequential Games with Imperfect Information

Equilibrium Selection in Sequential Games with Imperfect Information

Entry and Product Variety with Competing Supply Chains

Manufacturer collusion: Strategic implications of the channel structure

Contact Info

Product

Resources

About