Arbeitspapier

Which is better for durable goods producers, exclusive or open supply chain?

We explore the supply chain problem of a downstream durable goods monopolist, who chooses one of the following trading modes: an exclusive supply chain with an incumbent supplier or an open supply chain, allowing the monopolist to trade with a new efficient entrant in the future. The predicted retail price reduction in the future dampens the profitability of the original firms. An efficient entrant's entry magnifies such a price reduction, causing a further reduction of original firms' joint profits. In equilibrium, the downstream monopolist chooses the exclusive supply chain to escape further price reductions, although it anticipates efficient entry.

Language
Englisch

Bibliographic citation
Series: ISER Discussion Paper ; No. 1115

Classification
Wirtschaft
Monopoly; Monopolization Strategies
Monopolization; Horizontal Anticompetitive Practices
Vertical Restraints; Resale Price Maintenance; Quantity Discounts
Subject
Antitrust policy
Durable goods
Exclusive supply chain
Vertical relation

Event
Geistige Schöpfung
(who)
Kitamura, Hiroshi
Matsushima, Noriaki
Sato, Misato
Event
Veröffentlichung
(who)
Osaka University, Institute of Social and Economic Research (ISER)
(where)
Osaka
(when)
2021

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Kitamura, Hiroshi
  • Matsushima, Noriaki
  • Sato, Misato
  • Osaka University, Institute of Social and Economic Research (ISER)

Time of origin

  • 2021

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