When retailers must commit to shipment quantities prior to resolution of demand uncertainty, manufacturer stipulation of a minimum retail price is likely to be profitable for the manufacturer, and not damaging to the retailers. The reason is simple: If demand turns out to be low, the unfettered...

An independent firm that is the sole distributor of an upstream monopoly supplier has a stronger incentive to discover and adopt cost-reducing innovations than would a competitive distribution industry bound to the same upstream supplier. This is true whether the downstream pricing behavior is...