Tuesday, November 8, 2011
Posted by D. Daniel Sokol
Philippe Cyrenne, Department of Economics The University of Winnipeg has written on Dual Distribution and Differentiated Products.
ABSTRACT: This paper develops an approach to analyzing the equilibrium in markets where firms selling differentiated products can choose dual distribution to sell their products. Dual distribution involves a firm selling its product both through company owned stores and through independently operated franchises. In choosing the proportion of company owned versus franchise stores, in equilibrium, the firms have no incentive to alter this ratio given the proportions chosen by rival firms. The approach taken here in analyzing dual distribution is quite general and can be applied in a variety of settings.