Abstract

We study a model of interlocking vertical relationships between manufacturers and retailers where the latter select which product(s) to distribute on the market. We highlight that the degree of substitution among retailers as well as their bargaining power vis-à-vis manufacturers play a critical role on retail assortments. When both are sufficiently weak, we show that at least one retailer has an incentive to restrict its assortment which decreases product variety and leads to higher prices for consumers. We also analyze the effect of downstream consolidation through buying groups and retail merger and derive policy implications.
Joint work with Claire Chambolle and Hugo Molina

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Location
Room 1Z71
Building North ENS Paris-Saclay
4 avenue des Sciences 91200 Gif-sur-Yvette