English, Article, Journal or magazine article edition: Vertical Relations in the Presence of Competitive Recycling Liliane Karlinger

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Bookmark: http://trove.nla.gov.au/version/72397
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Vertical Relations in the Presence of Competitive Recycling
Author
  • Liliane Karlinger
Physical Description
  • preprint
Notes
  • This paper studies the vertical relations between a manufacturer and one or more retailers over two periods in the presence of a competitive recycling sector. In a bilateral monopoly, contracting is (generally) efficient, i.e. the manufacturer will produce the joint-profit-maximizing output. However, both competition downstream and upstream may lead to inefficient outcomes: Under retailer competition, some rent will be siphoned off by the recycling sector, and so the manufacturer will either overproduce in the second period or underproduce in the first period. If instead upstream entry occurs and full rent extraction is not possible, then the incumbent may overproduce in the pre-entry period. Vertical restraints that restore profit maximization (e.g. loyalty rebates) will harm consumers whenever the manufacturer would overproduce otherwise.
  • RePEc:vie:viennp:0910
Language
  • English
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