Strategic Effects of Private Labels and Horizontal Integration
Abstract:Why would retailers want to introduce private labels in a given product category? This paper examines this question, focusing especially on the effects of the emergence of private labels on the relative power of retailers vis à vis national brand manufacturers. The analysis allows for different degrees of competition in the vertical structure, and for linear and non-linear pricing. We show that retailers' gains from introducing private labels increase with the concentration of the retail market both with linear and non-linear pricing.
Document Type: Research Article
Publication date: July 1, 2004