Upstream collusion and downstream managerial incentives

Junsong Bian; Kin Keung  Lai; Zhongsheng Hua

doi:10.1016/j.econlet.2012.09.034

Upstream collusion and downstream managerial incentives

Junsong Bian, Kin Keung Lai, Zhongsheng Hua

Research output: Contribution to journal › Article

3 Citations (Scopus)

Abstract

We investigate the effects of downstream firms’ managerial incentives on upstream collusion. Downstream profit-and-revenue incentive schemes make upstream manufacturers easier to collude than a pure-profit incentive scheme does when retailers compete in prices. However, the opposite occurs under quantity competition.

Original language	English
Pages (from-to)	97-100
Number of pages	4
Journal	Economics letters
Volume	118
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2012.09.034
Publication status	Published - 2013
Externally published	Yes

Keywords

collusion
incentive
vertical channel
price and quantity competition

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title = "Upstream collusion and downstream managerial incentives",

abstract = "We investigate the effects of downstream firms’ managerial incentives on upstream collusion. Downstream profit-and-revenue incentive schemes make upstream manufacturers easier to collude than a pure-profit incentive scheme does when retailers compete in prices. However, the opposite occurs under quantity competition.",

keywords = "collusion, incentive, vertical channel, price and quantity competition",

author = "Junsong Bian and Lai, {Kin Keung} and Zhongsheng Hua",

year = "2013",

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AU - Lai, Kin Keung

AU - Hua, Zhongsheng

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AB - We investigate the effects of downstream firms’ managerial incentives on upstream collusion. Downstream profit-and-revenue incentive schemes make upstream manufacturers easier to collude than a pure-profit incentive scheme does when retailers compete in prices. However, the opposite occurs under quantity competition.

KW - collusion

KW - incentive

KW - vertical channel

KW - price and quantity competition

U2 - 10.1016/j.econlet.2012.09.034

DO - 10.1016/j.econlet.2012.09.034

M3 - Article

VL - 118

SP - 97

EP - 100

JO - Economics Letters

JF - Economics Letters

SN - 0165-1765

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