| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP11948
|
| DP11948 Salience in Retailing: Vertical Restraints on Internet Sales |
| Fabian Herweg
|
| 发表日期 | 2017-03-30
|
| 出版年 | 2017
|
| 语种 | 英语
|
| 摘要 | We provide an explanation for a frequently observed vertical restraint in e-commerce, namely that brand manufacturers partially or completely prohibit that retailers distribute their high-quality products over the internet. Our analysis is based on the assumption that a consumer's purchasing decision is distorted by salient thinking, i.e. by the fact that he overvalues a product attribute -- quality or price -- that stands out in a particular choice situation. In a highly competitive low-price environment like on an online platform, consumers focus more on price rather than quality. Especially if the market power of local (physical) retailers is low, price tends to be salient also in the local store, which is unfavorable for the high-quality product and limits the wholesale price a brand manufacturer can charge. If, however, the branded product is not available online, a retailer can charge a significant markup on the high-quality good. As the markup is higher if quality rather than price is salient in the store, this aligns the retailer's incentives with the brand manufacturer's interest to make quality the salient attribute and allows the manufacturer to charge a higher wholesale price.
We also show that, the weaker are consumers' preferences for purchasing in the physical store and the stronger their salience bias, the more likely it is that a brand manufacturer wants to restrict online sales. Moreover, we find that a ban on distribution systems that prohibit internet sales increases consumer welfare and total welfare, because it leads to lower prices for final consumers and prevents inefficient online sales. |
| 主题 | Industrial Organization
|
| 关键词 | Internet competition
Relative thinking
Retailing
Salience
Selective distribution
Vertical restraints
|
| URL | https://cepr.org/publications/dp11948
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540760
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推荐引用方式
GB/T 7714 |
Fabian Herweg. DP11948 Salience in Retailing: Vertical Restraints on Internet Sales. 2017.
|
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