Access the full text.
Sign up today, get DeepDyve free for 14 days.
Loading next page...
/lp/wiley/product-differentiation-by-competing-vertical-hierarchies-POI04fOCf4
References (49)
-
V. Ginsburgh, A. Palma, Y. Papageorgiou, Jacques-François Thisse (1985)
The Principle of Minimum Differentiation Holds under Sufficient HeterogeneityEconometrica, 53
-
Bonanno Bonanno, Vickers Vickers (1988)
Vertical SeparationJournal of Industrial Economics, 36
-
L. Pepall, G. Norman (2001)
Product Differentiation and Upstream‐Downstream RelationsJournal of Economics and Management Strategy, 10
-
John Asker (2004)
Diagnosing Foreclosure Due to Exclusive DealingMicroeconomics: Production
-
K. Kühn (1997)
Nonlinear Pricing in Vertically Related DuopoliesSocial Science Research Network
-
B. Rhee (1989)
Restoring the principle of minimum differentiation -
Jakub Kastl, D. Martimort, S. Piccolo (2011)
'When Should Manufacturers Want Fair Trade?': New Insights from Asymmetric Information When Supply Chains CompeteInternational Trade eJournal
-
R. Inderst, T. Valletti (2006)
Price Discrimination in Input MarketsIO: Regulation
-
H. Bester (1998)
Quality Uncertainty Mitigates Product DifferentiationThe RAND Journal of Economics, 29
-
K. Lancaster (1990)
The Economics of Product Variety: A SurveyMarketing Science, 9
-
S. Colombo (2013)
Product Differentiation and Collusion Sustainability When Collusion Is CostlyMark. Sci., 32
-
Douglas Diamond, Robert Verrecchia (1991)
Disclosure, Liquidity, and the Cost of CapitalJournal of Finance, 46
-
D. Neven (1986)
On hotelling’s competition with non uniform customer distributionsEconomics Letters, 21
-
B. Rhee, A. Palma, C. Fornell, Jacques-François Thisse (1992)
RESTORING THE PRINCIPLE OF MINIMUM DIFFERENTIATION IN PRODUCT POSITIONINGJournal of Economics and Management Strategy, 1
-
J. Mortimer (2008)
Vertical Contracts in the Video Rental IndustryThe Review of Economic Studies, 75
-
C. Christou, Nikolaos Vettas (2004)
Location Choices Under Quality UncertaintyIO: Empirical Studies of Firms & Markets
-
Kastl Kastl, Martimort Martimort, Piccolo Piccolo (2011)
When Should Manufacturers Want Fair Trade? New Insights from Asymmetric InformationJournal of Economics & Management Strategy, 3
-
D. Martimort, S. Piccolo (2010)
The Strategic Value of Quantity Forcing ContractsAmerican Economic Journal: Microeconomics, 2
-
Francine Lafontaine, K. Shaw (1996)
The Dynamics of Franchise Contracting: Evidence from Panel DataJournal of Political Economy, 107
-
Francine Lafontaine, M. Slade (2003)
Retail Contracting: Theory and PracticeJournal of Industrial Economics, 45
-
Esther Gal‐Or (1999)
Vertical integration or separation of the sales function as implied by competitive forcesInternational Journal of Industrial Organization, 17
-
H. Hotelling (1929)
Stability in CompetitionThe Economic Journal, 39
-
J. Tirole (1988)
The Theory of Industrial Organization -
Luciano Messori (2013)
The Theory of Incentives I: The Principal-Agent Model -
Frago Kourandi, Nikolaos Vettas (2010)
Endogenous Spatial Differentiation with Vertical ContractingCEPR Discussion Paper Series
-
B. Caillaud, B. Jullien, P. Picard (1993)
Competing vertical structures: precommitment and renegotiation. revised version -
C. d'Aspremont, J. Gabszewicz, Jacques-François Thisse (1979)
On hotelling's "Stability in competition"Econometrica, 47
-
Esther Gal‐Or (1991)
Duopolistic vertical restraintsEuropean Economic Review, 35
-
T. Tabuchi, Jacques-François Thisse (1995)
Asymmetric equilibria in spatial competitionInternational Journal of Industrial Organization, 13
-
Kieron Meagher, Klaus Zauner (2004)
Product differentiation and location decisions under demand uncertaintyJ. Econ. Theory, 117
-
B. Blair, T. Lewis (1994)
Optimal Retail Contracts with Asymmetric Information and Moral HazardThe RAND Journal of Economics, 25
-
Noriaki Matsushima (2004)
Technology of upstream firms and equilibrium product differentiationInternational Journal of Industrial Organization, 22
-
Wen-Jung Liang, C. Mai (2006)
Validity of the principle of minimum differentiation under vertical subcontractingRegional Science and Urban Economics, 36
-
D. Martimort (1996)
Exclusive Dealing, Common Agency, and Multiprincipals Incentive TheoryThe RAND Journal of Economics, 27
-
D. Martimort, Lars Stole (2009)
Selecting equilibria in common agency gamesJ. Econ. Theory, 144
-
D. Martimort, A. Semenov (2006)
Continuity in Mechanism Design without TransfersEconomics Letters, 93
-
Kali Rath, G. Zhao (2001)
Two stage equilibrium and product choice with elastic demandInternational Journal of Industrial Organization, 19
-
A. Ellul, T. Jappelli, M. Pagano, Fausto Panunzi (2012)
Transparency, Tax Pressure and Access to FinanceCorporate Finance: Valuation
-
(2003)
Cost Uncertainty and Partial Agglomeration , ” Mimeo . -
Esther Gal‐Or (1991)
VERTICAL RESTRAINTS WITH INCOMPLETE INFORMATIONJournal of Industrial Economics, 39
-
B. Caillaud, B. Jullien, P. Picard (1995)
COMPETING VERTICAL STRUCTURES: PRECOMMITMENT AND RENEGOTIATIONEconometrica, 63
-
Sabine Bockem (1994)
A Generalized Model of Horizontal Product DifferentiationJournal of Industrial Economics, 42
-
A. Ellul, T. Jappelli, M. Pagano, Fausto Panunzi (2010)
Accounting Transparency, Tax Pressure and Access to Finance -
N. Economides (1986)
Minimal and maximal product differentiation in Hotelling's duopolyEconomics Letters, 21
-
J. Friedman, Jacques-François Thisse (1993)
Partial Collusion Fosters Minimum Product DifferentiationThe RAND Journal of Economics, 24
-
Kuhn Kuhn (1997)
Nonlinear Pricing in Vertically Related DuopoliesRAND Journal of Economics, 28
-
Marco Pagnozzi, S. Piccolo (2012)
Vertical Separation with Private ContractsWiley-Blackwell: Economic Journal
-
Kurt Brekke, O. Straume (2004)
Bilateral monopolies and location choiceRegional Science and Urban Economics, 34
-
C. Mai, S. Peng (1999)
Cooperation vs. competition in a spatial modelRegional Science and Urban Economics, 29
- Publisher
- Wiley
- Copyright
- Copyright © 2015 Wiley Periodicals, Inc.
- ISSN
- 1058-6407
- eISSN
- 1530-9134
- DOI
- 10.1111/jems.12115
- Publisher site
- See Article on Publisher Site
Abstract
We revisit the choice of product differentiation in the Hotelling model, by assuming that competing firms are vertically separated, and that retailers choose products' characteristics. The “principle of differentiation” does not hold because retailers with private information about their marginal costs produce less differentiated products in order to increase their information rents. Hence, information asymmetry within vertical hierarchies may increase social welfare by inducing them to sell products that appeal to a larger number of consumers. We show that the socially optimal level of transparency between manufacturers and retailers depends on the weight assigned to consumers' surplus and trades off two effects: higher transparency reduces price distortion but induces retailers to produce excessively similar products.
Journal
Journal of Economics & Management Strategy – Wiley
Published: Oct 1, 2015