Seminar

Past

Fair Pricing, Upstream Market Power, and Vertical Restraint

Stephen F. Hamilton

  • Date18 October 2024
  • Time 11h00 - 12h30
  • Room Auditorium 4

Abstract

Fair pricing standards are used in various industries, encompassing fair trade, labor practices, and state-regulated pricing. We demonstrate that fair pricing can serve as a vertical restraint by a dominant manufacturer on its retailers to fully coordinating prices in a multi-product distribution channel with fair priced and conventional goods. We identify buyer market power by the manufacturer in the upstream market as a novel role for a manufacturer to impose a vertical restraint on retailers in the downstream market, and characterize the vertical restraint that maximizes collective rents in terms of demand-side and supply-side diversion ratios.

Related document(s)

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