Wholesale pricing with incomplete information about private label products

Arbeitspapier

This article provides a theoretical model analyzing wholesale pricing tariffs set by a monopolistic manufacturer for its branded product that is sold to final customers by a monopolistic retailer. The bargaining power of the downstream retailer is strengthened by offering also a vertically differentiated private label product whose production costs are known only incompletely to the upstream manufacturer. The model shows that the manufacturer can avoid double marginalization and implement the full information outcome by combining a quantity discount with a market-share discount where only a retailer with a strong private label retroactively receives an allowance. Under these circumstances it is unprofitable for the manufacturer to impose exclusive dealing on the retailer.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 36-2017

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Asymmetric and Private Information; Mechanism Design ; Information and Product Quality; Standardization and Compatibility ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts
• Subject: Branded Products ; Incomplete Information ; Market-Share Discounts ; Private Label Products ; Wholesale Pricing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Paha, Johannes
• Event: Veröffentlichung
• (who): Philipps-University Marburg, School of Business and Economics
• (where): Marburg
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/174332
• Last update: 10.03.2025, 11:44 AM CET