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Salvatore PICCOLO (University of Bergamo) – "Endogenous Retail Network" joint with Marco Pagnozzi and Markus Reisinger

May 16, 2018 @ 12:15 pm - 1:30 pm

The Microeconomics Seminar: Every Wednesday at 12:15 pm.

Time: 12:15 pm – 1:30 pm
Date: 16th of May 2018
Place: Room 3001.

Salvatore PICCOLO (University of Bergamo) – “Endogenous Retail Network” joint with Marco Pagnozzi and Markus Reisinger

Abstract: A manufacturer chooses the optimal size of her retail network and bilaterally and secretly contracts with each retailer. In a classic framework without asymmetric information, the manufacturer deals with one retailer exclusively in order to eliminate the opportunism problem. When retailers are privately informed about their (common) marginal cost, however, the network size also affects a retailer’s incentive to misreport his cost. We show that the manufacturer prefers to sell through multiple retailers in order to exploit the disciplining effect of downstream competition on retailers’ information rents. We also highlight how the manufacturer’s technology and the elasticity of final demand affect the choice of the retail network.

Organizers: Marie-Laure Allain, Pierre Boyer, Laurent Linnemer  &  Morgane Cure (CREST)


Food is provided.