The Impact of Upfront Payments on Assortment Decisions in Retailing |
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| Authors: | Pio Baake Vanessa von Schlippenbach |
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| Institution: | 1. Deutsches Institut für Wirtschaftsforschung (DIW), Mohrenstr. 58, 10117?, Berlin, Germany
2. Duesseldorf Institute for Competition Economics (DICE), Heinrich-Heine-Universit?t Düsseldorf, Universit?tsstr. 1, 40225?, Düsseldorf, Germany
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| Abstract: | There is a contentious debate about the exclusionary effects of upfront payments to be made by manufacturers to place their products on retailers’ shelves. Analyzing a two-stage bargaining process with one downstream retailer and a pool of upstream manufacturers, we find that upfront payments lead to a smaller assortment if the retailer’s bargaining power is high enough and the suppliers’ products are close substitutes. |
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