Returns Policies and Retail Price Competition

We show that returns policies do increase manufacturer profitability by attenuating price competition between retailers. This effect holds only in the presence of end-user demand uncertainty. The conditions under which a returns policy raises the manufacturer's profit are weaker when retailing is a duopoly than when retailing is a monopoly. This suggests that returns policies serve both to dampen competition and resolve demand uncertainty.

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Year of publication:	2004-01-25
Authors:	Padmanabhan, V. ; Png, I.P.L.
Institutions:	EconWPA
Subject:	channels \| competition \| returns \| pricing

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Extent:	application/pdf
Series:	Industrial Organization.
Type of publication:	Book / Working Paper
Notes:	Type of Document - pdf; prepared on Windows-XP; pages: 15 15 pages
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; D83 - Search, Learning, Information and Knowledge ; L13 - Oligopoly and Other Imperfect Markets ; M30 - Marketing and Advertising. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005134512