Colluding through suppliers

Salvatore Piccolo, Jeannine Miklós Thal

Risultato della ricerca: Contributo in rivistaArticolo in rivista

19 Citazioni (Scopus)

Abstract

This article investigates downstream firms’ ability to collude in a repeated game of competition between supply chains. We show that downstream firms with buyer power can collude more easily in the output market if they also collude on their input supply contracts. More specifically, an implicit agreement on input supply contracts with above-cost wholesale prices and negative fixed fees (that is, slotting fees) facilitates collusion on downstream prices. Banning information exchange about wholesale prices decreases the scope for collusion. Moreover, high downstream prices are more difficult to sustain if upstream rather than downstream firms make contract offers.
Lingua originaleEnglish
pagine (da-a)492-513
Numero di pagine22
RivistaRAND Journal of Economics
Volume43
DOI
Stato di pubblicazionePubblicato - 2012

Keywords

  • Collusion
  • double marginalization
  • retail competition
  • vertical contracting

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