Vertical control of a distribution network—an empirical analysis of magazines
研究了上游企业如何决定分销网络规模及纵向约束的作用，通过两种实证模型分析杂志分销，发现统一批发价格比统一特许权费更能应对地方市场差异。
How does an upstream firm determine the size of its distribution network, and what is the role of vertical restraints? To address these questions, we develop two empirical entry models. In the benchmark coordinated entry model, the upstream firm sets market‐specific wholesale prices and implements the first best. In the more realistic restricted/free entry model, the upstream firm only sets a uniform wholesale price. As a second‐best solution, it restricts entry in markets where business stealing (encroachment) is high, and allows free entry elsewhere. We apply the model to magazine distribution, and assess the profitability of alternative vertical restraints. Banning restricted licensing reduces profits only slightly, so the business rationale for restricted licensing should not be sought in the prevention of encroachment. Furthermore, market‐specific wholesale prices implement the first best, but the profit increase would be small, providing a rationale for the commonly observed uniform wholesale prices. Finally, uniform franchise fees are much less effective than a uniform wholesale price to cope with local market differences .