Arbeitspapier
Vertical bargaining and obfuscation
Manufacturers often engage in practices that impede consumer search. Examples include proliferating product varieties, imposing vertical informational restraints, and banning online sales to make it more difficult for consumers to compare prices. This paper models vertical bargaining over wholesale prices and obfuscation levels and finds that obfuscation arises in equilibrium whenever retailers have some bargaining power. Once the bargaining power rests with the manufacturer, the equilibrium involves no obfuscation. The final consumers, however, are worse off compared with settings when retailers have all the bargaining power. We show that in vertical markets, policies that impose caps on obfuscation may induce higher wholesale and retail prices. Instead, we propose caps on wholesale prices as an effective consumer protection policy.
- Sprache
-
Englisch
- Erschienen in
-
Series: Bank of Canada Staff Working Paper ; No. 2022-13
- Klassifikation
-
Wirtschaft
Game Theory and Bargaining Theory: General
Vertical Restraints; Resale Price Maintenance; Quantity Discounts
Oligopoly and Other Imperfect Markets
- Thema
-
Economic models
Market structure and pricing
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Reshidi, Edona
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Canada
- (wo)
-
Ottawa
- (wann)
-
2022
- DOI
-
doi:10.34989/swp-2022-13
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Reshidi, Edona
- Bank of Canada
Entstanden
- 2022
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