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Impact of discounting and competition on benefit of decentralization with strategic customers. (English) Zbl 1242.91109
Summary: With strategic customers, we find that a decentralized channel may have higher profit than that of a centralized channel. We show that in addition to the double marginalization effect, both customer and firm discounting and retailer competition are also driving factors of the higher decentralized channel profit.

MSC:
91B42 Consumer behavior, demand theory
91B38 Production theory, theory of the firm
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