The Strategic Value of Quantity Forcing Contracts

Salvatore Piccolo, David Martimort

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

10 Citazioni (Scopus)

Abstract

We explore the strategic value of quantity forcing contracts in a manufacturer-retailer environment under both adverse selection and moral hazard. Manufacturers dealing with (exclusive) competing retailers may prefer to leave contracts silent on retail prices, whenever other aspects of the retailers’ activity remain nonverifiable. Two effects are at play when moving from retail price maintenance to quantity forcing. First, restricting screening possibilities may increase retailers’ rent. Second, such a restriction affects downstream competition. This latter effect may justify using quantity forcing contracts and, more generally, shed light on a novel source of contractual incompleteness.
Lingua originaleEnglish
pagine (da-a)204-229
Numero di pagine26
RivistaAmerican Economic Journal: Microeconomics
Stato di pubblicazionePubblicato - 2010

Keywords

  • Incomplete contracts
  • Strategic Value

Fingerprint Entra nei temi di ricerca di 'The Strategic Value of Quantity Forcing Contracts'. Insieme formano una fingerprint unica.

Cita questo