Exclusive Dealing and Price Promotions
J. OF BUSINESS, Vol. 69 No. 2, April 1996
Posted: 15 Jul 1998
We study retail price promotions and manufacturer trade deals in markets with exclusive dealing. We find thatmodels that do not account for the existence of retailers overestimate the depth of promotions. We then compare the price promotions outcomes of markets with and without exclusive dealing. We also evaluate whether exclusive dealing can be an equilibrium outcome, and find that, under certain conditions of the model, the equilibrium is for manufacturers to distribute through several retailers even though their profits might end up lower than if each retailer carried only one product.
JEL Classification: E37
Suggested Citation: Suggested Citation