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What is Vertical Contracts and Consumer Search about?

This paper analyzes the impact of consumer search on vertical contracts between manufacturers and retailers in a homogeneous goods market. It finds that consumer search significantly alters the nature of equilibrium contracts, particularly when two-part tariffs are used, as opposed to linear wholesale prices. The study emphasizes that ignoring search costs can lead to misleading conclusions in the vertical contracting literature.

Author

Belén Delgado

Language

EN