Revenue Sharing and Vertical Control in the Video Rental Industry
研究了收益分享合同在视频租赁行业中的应用，发现该合同能在需求不确定或变化时，通过缓和零售价格竞争而不扭曲库存决策，实现最优结果。
Revenue sharing contracts, in which retailers pay a royalty on sales to their suppliers, are now widely used in the video rental industry. We show that revenue sharing is valuable in vertically separated industries in which demand is either stochastic (unpredictable) or variable (e.g., systematically declining), downstream inventory is chosen before demand is realized and downstream firms engage in intrabrand competition. Unlike two‐part tariffs, revenue sharing achieves the first best outcome by softening retail price competition without distorting retailers’ inventory decisions. Our theories are also consistent with trends in prices and availability following retailers’ adoption of revenue sharing contracts.