Vertical Restraints and Horizontal Control

This paper considers vertical restraints in a multi-market retail setting in which each retailer sells the complete line of manufactured goods. Vertical restraints by one manufacturer on the retailers of its product serve as an instrument to exert horizontal control over the retail price of a rival manufactured good. Applications are developed for supermarket retailing, where the manufacturer of a national brand sold at both supermarkets can employ vertical restraints to control the pricing of the retailerÂ’'s competing private labels, and for the personal computer industry, where the manufacturer of an essential computer component can use vertical restraints to control the pricing of complementary components bundled with the essential component by original equipment manufacturers (OEMs).


Subject(s):
Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/21424
Total Pages:
31
JEL Codes:
L13; L14; L42; D43.
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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