Exclusive Dealing and Price Promotions

J. OF BUSINESS, Vol. 69 No. 2, April 1996

Posted: 15 Jul 1998

See all articles by Rajiv Lal

Rajiv Lal

Harvard University - Business School (HBS)

J. Miguel Villas-Boas

University of California, Berkeley

Abstract

We study retail price promotions and manufacturer trade deals in markets with exclusive dealing. We find thatmodels that do not account for the existence of retailers overestimate the depth of promotions. We then compare the price promotions outcomes of markets with and without exclusive dealing. We also evaluate whether exclusive dealing can be an equilibrium outcome, and find that, under certain conditions of the model, the equilibrium is for manufacturers to distribute through several retailers even though their profits might end up lower than if each retailer carried only one product.

JEL Classification: E37

Suggested Citation

Lal, Rajiv and Villas-Boas, J. Miguel, Exclusive Dealing and Price Promotions. J. OF BUSINESS, Vol. 69 No. 2, April 1996, Available at SSRN: https://ssrn.com/abstract=7053

Rajiv Lal (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-495-1257 (Phone)
617-496-5637 (Fax)

HOME PAGE: http://dor.hbs.edu/fi_redirect.jhtml?facInfo=bio&facEmId=rlal

J. Miguel Villas-Boas

University of California, Berkeley ( email )

Haas School of Business
Berkeley, CA 94720
United States
510-642-1250 (Phone)
510-643-1420 (Fax)

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