Limiting rival's efficiency via conditional discounts

Arbeitspapier

This paper studies the impact of a dominant firm's conditional discounts on competitors' learning-by-doing. In a vertical context where a dominant upstream supplier and a competitive fringe sell their products to a single downstream firm, we analyze whether the dominant supplier prefers to offer a discount scheme, as in particular a quantity or market-share discount. In a dynamic setting with complete information and learning-by-doing, short-term market-share discounts and long-run contracts are more profitable to the dominant supplier than simple two-part tariffs or quantity discounts. We show that two-part tariffs as well as quantity discounts lead to more learning than market-share discounts, or long-term contracts. Thus, the dominant firm's contract choice restricts the competitive fringe's efficiency gain. Similar results occur for network effects.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: BGPE Discussion Paper ; No. 132

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts
• Thema: Market-share discounts ; quantity discounts ; learning-by-doing ; dominant upstream supplier ; competitive fringe.

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Greer, Katja
• Ereignis: Veröffentlichung
• (wer): Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE)
• (wo): Nürnberg
• (wann): 2013

Weitere Informationen

• Handle: http://hdl.handle.net/10419/73450
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ