An Industry Equilibrium Analysis of Downstream Vertical Integration

摘要: This paper investigates the effect of product substitutability on Nash equilibrium distribution structures in a duopoly where each manufacturer distributes its goods through single exclusive retailer, which may be either franchised outlet or factory store. Static linear demand and cost functions are assumed, number rules about players' expectations competitors' behavior examined. It is found that for most specifications does influence structure. For low degrees substitutability, will distribute company store; more highly competitive goods, manufacturers likely to use decentralized system. This article was originally published Marketing Science, Volume 2, Issue pages 161--191, 1983.