Upfront payments and exclusion in downstream markets
Publication
, Journal Article
Marx, LM; Shaffer, G
Published in: RAND Journal of Economics
January 1, 2007
Although upfront payments are often observed in contracts between manufacturers and retailers, little is known about their competitive effects or the role retailers play in securing them. In this article, we consider a model in which two competing retailers make take-it-or-leave-it offers to a common manufacturer. We find that upfront payments are a feature of equilibrium contracts, and in all equilibria, only one retailer buys from the manufacturer. These findings support the claims of small manufacturers who argue that they are often unable to obtain widespread distribution for their products because of upfront payments. Copyright © 2007, RAND.
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Published In
RAND Journal of Economics
DOI
ISSN
0741-6261
Publication Date
January 1, 2007
Volume
38
Issue
3
Start / End Page
823 / 843
Related Subject Headings
- Economics
- 3803 Economic theory
- 3802 Econometrics
- 3801 Applied economics
- 14 Economics
Citation
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Marx, L. M., & Shaffer, G. (2007). Upfront payments and exclusion in downstream markets. RAND Journal of Economics, 38(3), 823–843. https://doi.org/10.1111/j.0741-6261.2007.00114.x
Marx, L. M., and G. Shaffer. “Upfront payments and exclusion in downstream markets.” RAND Journal of Economics 38, no. 3 (January 1, 2007): 823–43. https://doi.org/10.1111/j.0741-6261.2007.00114.x.
Marx LM, Shaffer G. Upfront payments and exclusion in downstream markets. RAND Journal of Economics. 2007 Jan 1;38(3):823–43.
Marx, L. M., and G. Shaffer. “Upfront payments and exclusion in downstream markets.” RAND Journal of Economics, vol. 38, no. 3, Jan. 2007, pp. 823–43. Scopus, doi:10.1111/j.0741-6261.2007.00114.x.
Marx LM, Shaffer G. Upfront payments and exclusion in downstream markets. RAND Journal of Economics. 2007 Jan 1;38(3):823–843.
Published In
RAND Journal of Economics
DOI
ISSN
0741-6261
Publication Date
January 1, 2007
Volume
38
Issue
3
Start / End Page
823 / 843
Related Subject Headings
- Economics
- 3803 Economic theory
- 3802 Econometrics
- 3801 Applied economics
- 14 Economics