This paper studies the vertical distribution arrangement between manufacturers and retailers in a two dimensional horizontal product differentiation framework. Products are differentiated along consumers' taste and retailers' location. Consumers have to incur transportation costs to visit a...

This paper analyses manufacturers' choice of vertical arrangement with retailers. We focus on two types of vertical arrangement; exclusive dealing and exclusive territory. Both are used by manufacturers as instruments to reduce competition between manufacturers. Exclusive dealing is used to...

This paper revisits the soft budget constraint problem, pushing sub-central (state) borrowing to the limit in multi-tiered countries. Accounting for the institutional design and political practice common to many federations, bargaining and log-rolling are introduced to the analysis. In our...