Empirical Evidence on Conditional Pricing Practices

26 Pages Posted: 7 Jun 2016

See all articles by Bogdan Genchev

Bogdan Genchev

Boston College

Julie H. Mortimer

Boston College; National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Date Written: June 2016

Abstract

Conditional pricing practices allow the terms of sale between a producer and a downstream distributor to vary based on the ability of the downstream firm to meet a set of conditions put forward by the producer. The conditions may require a downstream firm to accept minimum quantities or multiple products, to adhere to minimum market-share requirements, or even to deal exclusively with one producer. The form of payment from the producer to the downstream firm may take the form of a rebate, marketing support, or simply the willingness to supply inventory. The use of conditional pricing practices is widespread throughout many industries, and the variety of contractual forms used in these arrangements is nearly as extensive as the number of contracts. This paper reviews empirical evidence on these arrangements.

Suggested Citation

Genchev, Bogdan and Mortimer, Julie H., Empirical Evidence on Conditional Pricing Practices (June 2016). NBER Working Paper No. w22313, Available at SSRN: https://ssrn.com/abstract=2790710

Bogdan Genchev (Contact Author)

Boston College

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Julie H. Mortimer

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HOME PAGE: http://fmwww.bc.edu/ec/mortimer.php

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Harvard University - Department of Economics ( email )

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