Supplier Encroachment and Investment Spillovers
研究发现制造商进入零售市场可能通过成本降低投资溢出使零售商受益，只要产品差异化足够，就能实现供应链帕累托改进。
It is conventional wisdom that a manufacturer's encroachment into retail space will likely hurt an existing retailer. In contrast to this conventional belief, current research indicates that a retailer may welcome a manufacturer's encroachment despite the new competition in the final market. The encroachment may help the manufacturer have some “skin in the game” at the retail level, which will cause the manufacturer to make a selfish cost‐reducing investment that spills over to the retailer as a lower wholesale price. Such a spillover effect enhances the retailer's profit as long as the encroachment does not result in extreme retail competition by a certain degree of product differentiation, and ultimately generates Pareto gains in the supply chain. The spillover effect is so robust that the retailer's benefit from the encroachment remains even after considering potential mitigating factors such as selling costs, a nonlinear form of cost reduction, decentralized encroachment, additional retail competition, price competition, and a negotiation between the manufacturer and the retailer.