Slotting allowances and retail product variety under oligopoly. (English) Zbl 1396.91435
Summary: Slotting fees are lump-sum charges paid by manufacturers to retailers for shelf space. In this letter we examine the strategic effect of slotting allowances on product variety. In a spatial model where consumers each have unit demand for their preferred product variant and retailers jointly select prices and product variety, we show that variety is (1) under-provided without slotting contracts and (2) efficiently supplied under equilibrium slotting fees.
MSC:
| 91B54 | Special types of economic markets (including Cournot, Bertrand) |
References:
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