Each year in the U.S., manufacturers, distributors and retailers pay or receive billions of dollars in vendor incentives. The payments are an integral part of the marketing plans of many sellers and resellers. Yet, they are largely invisible to investors. Because the payments involved often are...

Loyalty discounts and rebates are pricing schemes that offer incentives to buyers for reaching or exceeding certain sales thresholds. In the case of market share discounts, thresholds are expressed as a percentage of the buyer's total purchase requirements. Although market share discounts may...

The countervailing power of large buyers subdues the market power of sellers, but price concessions won by large buyers in upstream markets may or may not translate into lower prices downstream. This paper presents a model in which upstream price concessions leads to lower downstream prices. In...

The recent Supreme Court opinion in Leegin reversed the long-standing precedent of Dr. Miles Medical. Resale price maintenance (RPM) is no longer condemned per se but instead is treated under the rule of reason. This ruling allows an inquiry as to the economic rationale and competitive...

Abba Lerner's paper in the Review of Economic Studies (1934) is the source of what is now referred to as the Lerner Index of monopoly power. The Lerner Index has become the standard measure of monopoly power and one of the most widely cited indexes in the discipline of economics. This paper...

This paper concerns the sale of a vertically differentiated good by a manufacturer to retailers that have market power when reselling to consumers. The contractual relationships between the manufacturer and individual retailers are characterized as ldquo;quasi-partnerships,rdquo; reflecting the...

This paper investigates the exercise of market power by a large buyer who emerges via growth, merger, or group purchasing. It explores the efficiency and redistributive effects of such an event when a competitive fringe of small buyers remains in the market. Terms of trade, including those for...