A manufacturer’s incentive to open its direct channel and its impact on welfare

Matsushima, Noriaki; Mizuno, Tomomichi; Pan, Cong

Institute of Social and Economic Research Discussion Papers, 2018, 1026, 1-19

Number of Access:324（2025-07-24 04:24 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/68198

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Title
A manufacturer’s incentive to open its direct channel and its impact on welfare
Creator
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
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Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
NRID
1000060589315 1000060589315
CreatorName
Mizuno, Tomomichi
NRID
1000030807425 1000030807425
CreatorName
Pan, Cong
Subject
distribution channels
supplier encroachment
two-part tariff contract
welfare
Abstract
We consider a bilateral monopoly in which a manufacturer can open its direct channel that is less efficient than the existing retailer. We find the following results. The manufacturer opens its direct channel if its bargaining power over the existing retailer is weak. Opening the direct channel is detrimental to social welfare if this channel is efficient. Under a linear demand specification, if the equilibrium unit price under such opening is higher than that under no opening, the opening reduces social welfare under most of the parameter range of the efficiency of the manufacturer’s direct channel.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
1026
Page
1-19
Date of Issued
2018-03-27
Language
English
Handle URL
https://hdl.handle.net/11094/68198
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2018/DP1026.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers