Correlated Contracts in Oligopoly.
The author considers a market that consists of two competing franchise systems and focuses attention on franchise agreements that specify the payment of the franchisees as a quantity contingent nonlinear price schedule. At the equilibrium, the schedule of wholesale prices reflects both an 'informational' and a 'strategic' component, where the informational component is weakened if the unit costs of competing franchisees are correlated. One of the multiple equilibria that exist with correlation enables each franchiser to extract the complete producer surplus. Franchisers may prefer, however, other equilibria where franchisees can earn positive informational rents. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Year of publication: |
1995
|
---|---|
Authors: | Gal-Or, Esther |
Published in: |
International Economic Review. - Department of Economics. - Vol. 36.1995, 1, p. 75-100
|
Publisher: |
Department of Economics |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The Name-Your-Own-Price Channel in the Travel Industry: An Analytical Exploration
Wang, Tuo, (2009)
-
Who benefits from bilateral information exchange in a retail channel?
Dukes, Anthony, (2011)
-
Bundling Strategies When Products Are Vertically Differentiated and Capacities Are Limited
Banciu, Mihai, (2010)
- More ...