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Title: Essays on strategic firms, vertical contracts and horizontal agreements
Author: Lu, Liang
ISNI:       0000 0004 6058 8352
Awarding Body: University of East Anglia
Current Institution: University of East Anglia
Date of Award: 2016
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Inspired by some newly emerged topics from the real world, this thesis comprises of four essays that study firms’ strategic incentives, as well as the vertical and horizontal agreements between firms. The first essay assesses theoretically firms’ incentives to engage in quality proliferation. We show that it is possible for vertical proliferation to be completely undesirable in the absence of entry threats, therefore proliferation of any level might be anticompetitive. Nevertheless, when proliferation is optimally conducted, it always benefits consumers. The second and third essays focus on vertical contracts between successive stages of production. The second essay places the controversial agency model involved in the e-book case in the context of antitrust treatment to vertical restraints, and examines its effects on competition and welfare relative to the wholesale model. The third essay goes beyond and develops a framework allowing us to clarify the ceteris paribus effects of changing each of the two key elements written in a vertical contract: decision roles and forms of the transfer payment. Based on this framework, we show that it is meaningful to distinguish between classic RRM, by which a manufacturer sets the transfer payment as well as the retail price, and agency RPM, by which a retailer is able to set the transfer payment before a manufacturer set the retail price. The final essay focuses on horizontal cartel agreements and experimentally investigates the effects of endogenous enforcement on cartel prices. We highlight the strategic uncertainty in cartel coordination as a channel of composition deterrence, as well as the potential trade-off between frequency and composition deterrence.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available