Document de travail

Supplier Fixed costs and Retail Market Monopolization

Stéphane Caprice, Vanessa von Schlippenbach et Christian Wey

Résumé

Considering a vertical structure with perfectly competitive upstream firms that deliver a homogenous good to a differentiated retail duopoly, we show that upstream fixed costs may help to monopolize the downstream market. We find that downstream prices increase in upstream firms'fixed costs when both intra- and interbrand competition exist. Our findings contradict the common wisdom that fixed costs do not affect market outcomes.

Mots-clés

Fixed Costs; Vertical Contracting; Monopolization;

Codes JEL

  • L13: Oligopoly and Other Imperfect Markets
  • L14: Transactional Relationships • Contracts and Reputation • Networks
  • L42: Vertical Restraints • Resale Price Maintenance • Quantity Discounts

Référence

Stéphane Caprice, Vanessa von Schlippenbach et Christian Wey, « Supplier Fixed costs and Retail Market Monopolization », TSE Working Paper, n° 14-524, juillet 2014.

Voir aussi

Publié dans

TSE Working Paper, n° 14-524, juillet 2014