Supplier fixed costs and retail market monopolization

Stéphane Caprice; Vanessa von Schlippenbach; Christian Wey

Considering a vertical structure with perfectly competitive upstream firms that deliver a homogenous good to a differentiated retail duopoly, we show that upstream fixed costs may help to monopolize the downstream market. We find that downstream prices increase in upstream firms' fixed costs when both intra- and interbrand competition exist. Our findings contradict the common wisdom that fixed costs do not affect market outcomes.

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Year of publication:	2014
Authors:	Caprice, Stéphane ; Schlippenbach, Vanessa von ; Wey, Christian
Publisher:	Düsseldorf : DICE
Subject:	Fixed Costs \| Vertical Contracting \| Monopolization \| Fixkosten \| Fixed costs \| Lieferantenmanagement \| Supplier relationship management \| Monopol \| Monopoly \| Theorie \| Theory \| Einzelhandel \| Retail trade \| Vertikale Integration \| Vertical integration

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Extent:	Online-Ressource (22 S.) graph. Darst.
Series:	DICE discussion paper. - Düsseldorf, Germany : düsseldorf university press, ISSN 2190-9938, ZDB-ID 2578649-0. - Vol. 164
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
ISBN:	978-3-86304-163-2
Other identifiers:	hdl:10419/102763 [Handle]
Classification:	L13 - Oligopoly and Other Imperfect Markets ; L14 - Transactional Relationships; Contracts and Reputation; Networks ; L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10010417595