Browsing by Subject "debit cards"

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  • Saxén, Frans (Svenska handelshögskolan, 2013-10-22)
    Much of the analysis of industrial organization implicitly assumes that firms sell directly to final consumers. However, many firms do not sell directly to the final consumers, but rather use intermediaries, such as wholesalers and retailers to distribute their products. The presence of such intermediaries affects significantly market outcomes. In particular, the contracts between manufacturers and retailers may significantly affect market outcomes, e.g. volumes and prices. Characteristic for these contracts is that they may contain vertical restraints, restrictions on what the retailers may do once they have acquired the products for resell. Another characteristic feature of these contracts is that they are typically devised by sophisticated contracting parties, who have strategic objectives. The reason for manufacturers, or upstream firms to impose vertical restraints on retailers, or downstream firms is that the actions of the downstream firms affect the upstream firm’s profits. While vertical restraints may affect the profitability of the contracting parties, they may also affect other agents, such as consumers and suppliers. In this dissertation I focus on three distinct aspects of vertical relations. I look at how providers of payment cards affect competition between retailers, through the no surcharge rule; how suppliers can expand their output by financing the establishment of new retailers; and how buyer alliances can extract surplus from suppliers through the use of market share contracts. Common to these essays is the strategic behavior by agents on one level affecting market outcomes at another vertical level.