Vertical Control of Cournot Wholesalers in Spatial Competition: Exclusive Territories? Or Maximum Retail Price Stipulations?

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2005-01-27 DOI:10.2202/1546-5616.1032

Tatsuhiko Nariu, D. Flath

{"title":"Vertical Control of Cournot Wholesalers in Spatial Competition: Exclusive Territories? Or Maximum Retail Price Stipulations?","authors":"Tatsuhiko Nariu, D. Flath","doi":"10.2202/1546-5616.1032","DOIUrl":null,"url":null,"abstract":"In this paper, we use a spatial competition model developed by Pal (1998) to analyze producer imposed retail price ceilings and producer assigned exclusive geographic sales territories. Two wholesale distributors are presumed to each have a single collection point respectively from which they supply retail outlets at many locations. Each wholesaler chooses the quantity to ship to each outlet and the retail prices attain market clearing levels. Given that the costs of shipping depend on distance, this system results in waste in that the products are not shipped exclusively from the nearest collection point. As pointed out by Matsumura (2003) this wasteful cross-hauling can be prevented if the manufacturer assigns exclusive geographic territories to the distributors. But the costs of administering an exclusive territory system may well outweigh any savings in shipping costs. In this instance a manufacturer stipulated price ceiling may be the preferred alternative. By controlling not only the manufacturer price but also the retail price at each location, the manufacturer can deter wasteful cross-hauling and expand the overall channel profit, while also conferring enlarged consumer surplus.","PeriodicalId":35829,"journal":{"name":"Review of Marketing Science","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2005-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1546-5616.1032","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Marketing Science","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2202/1546-5616.1032","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"Business, Management and Accounting","Score":null,"Total":0}

引用次数: 1

Abstract

In this paper, we use a spatial competition model developed by Pal (1998) to analyze producer imposed retail price ceilings and producer assigned exclusive geographic sales territories. Two wholesale distributors are presumed to each have a single collection point respectively from which they supply retail outlets at many locations. Each wholesaler chooses the quantity to ship to each outlet and the retail prices attain market clearing levels. Given that the costs of shipping depend on distance, this system results in waste in that the products are not shipped exclusively from the nearest collection point. As pointed out by Matsumura (2003) this wasteful cross-hauling can be prevented if the manufacturer assigns exclusive geographic territories to the distributors. But the costs of administering an exclusive territory system may well outweigh any savings in shipping costs. In this instance a manufacturer stipulated price ceiling may be the preferred alternative. By controlling not only the manufacturer price but also the retail price at each location, the manufacturer can deter wasteful cross-hauling and expand the overall channel profit, while also conferring enlarged consumer surplus.

查看原文本刊更多论文

空间竞争中古诺批发商的纵向控制:独占领域?还是最高零售价格规定?

在本文中，我们使用Pal(1998)开发的空间竞争模型来分析生产者施加的零售价格上限和生产者分配的独家地理销售区域。假定两个批发分销商各自有一个收集点，从这个收集点向许多地点的零售网点供货。每个批发商选择运送到每个销售点的数量，零售价格达到市场清算水平。考虑到运输成本取决于距离，这种系统会导致浪费，因为产品不是完全从最近的收集点运输。正如Matsumura(2003)所指出的那样，如果制造商将独家地理区域分配给分销商，可以防止这种浪费的交叉运输。但是，管理专属领土制度的成本可能远远超过航运成本的节省。在这种情况下，制造商规定的价格上限可能是首选的选择。通过控制制造商价格和每个地点的零售价格，制造商可以阻止浪费的交叉运输，扩大整体渠道利润，同时也可以扩大消费者剩余。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.