Expanding distribution channels

Arbeitspapier

We provide a model in which upstream producers, whose production cost is quadratic in quantity, sell their products through two distribution channels, a traditional channel and an external retailer. Some producers (called "large" producers) supply to both channels, whereas other producers (called "small" producers) are only able to supply to the traditional channel. All producers compete in quantity in the traditional channel. The external retailer offers a nondiscriminatory per unit payment to upstream producers. We show that distribution channel expansion executed by a small producer can decrease the producer's profit and the sum of the upstream producers' profits.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 958

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Agricultural Markets and Marketing; Cooperatives; Agribusiness ; Marketing
• Subject: channel expansion ; dual channel ; increasing marginal cost ; retailers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Matsushima, Noriaki
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/148185
• Last update: 10.03.2025, 11:45 AM CET