A Comparison of the Wholesale Model and the Agency Model in Differentiated Markets

Liang Lu

Research output: Contribution to journalArticle

2 Citations (Scopus)
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Abstract

We compare the wholesale model and the agency model that characterise a vertical relation in a bilateral duopoly framework. Results suggest that the agency model may be regarded as an example of retailer power resale price maintenance and provide an economic view of why restraints of this kind should be evaluated under the rule of reason. While competition is more likely to be undercut under the agency model, relative to the wholesale model, the agency model benefits consumers by offering relatively lower retail prices and greater demand.
Original languageEnglish
Pages (from-to)151–172
Number of pages22
JournalReview of Industrial Organization
Volume51
Issue number2
Early online date19 Jul 2017
DOIs
Publication statusPublished - Sep 2017

Keywords

  • Agency model
  • Competition
  • Resale price maintenance
  • Retailer power
  • Vertical restraints

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