We investigate two very common pricing schemes for a Stackelberg-dominant retailer: percentage-markup and dollar-markup. We show that when a dominant retailer switches from dollar to percentage markup, the channel’s “overall pie” and the retailer’s “pie-piece” are both enlarged. In...

A dominant retailer will purchase a newsvendor-type product from a manufacturer, who incurs a unit manufacturing cost k. The expected retail demand is a function of the unit retail price p. How should the retailer design her purchase contract? For this increasingly prevalent but inadequately...

This paper on "resale price maintenance" (RPM) has three main parts: (i) Using a simple and parsimonious model, we show that even with only one retailer, a "supplier" or "manufacturer" (hereafter "Manu") should impose minimum-RPM under some circumstances but maximum-RPM in others. These two sets...

Consider a dominated manufacturer ("Manu") supplying a dominant retailer ("Reta"). Manu knows the product's unit manufacturing cost (m) deterministically, whereas Reta knows it only in the form of an a priori subjective distribution . Reta may implement any one of four contract formats:...