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Precommitment in Competing Vertical Chains
Author(s) -
Irmen Andreas
Publication year - 1998
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/1467-6419.00059
Subject(s) - precommitment , economics , competition (biology) , distribution (mathematics) , microeconomics , vertical restraints , industrial organization , marketing , business , mathematical analysis , ecology , mathematics , incentive , biology
The design of distribution channels is an important marketing decision since a revision implies costly reorganization. Hence, it makes sense to study strategic motives of alternative distribution devices. A precommitment is a strategic move that affects the other players’ expectations on how oneself will behave and thus induces them to choose in one's own favor (Schelling (1960)). How these tactics can be used by firms to favorably influence competition between vertical chains is the topic of the literature reviewed in this survey. JEL classification L22, L42, L81.