New product introduction and slotting fees*

Claire Chambolle (1, 2) , Clémence Christin (3)

1 CREST - Centre de Recherche en Économie et Statistique
2 ALISS - Alimentation et sciences sociales
3 CREM - Centre de recherche en économie et management

The availability of a new product in a store creates an informative spillover that extends past the store itself through word-of-mouth advertising. Because of this spillover, each retailer is able to extract a slotting fee from the manufacturer at product introduction. Slotting fees may discourage innovation by the manufacturer and, in turn, reduce consumer surplus and social welfare. A manufacturer is more likely to pay lower slotting fees when it can advertise more heavily, or when it faces a larger buyer. These results are robust to variations in retail competition, firms' discount factors, and the identity of the innovating firm.

Mots clés: Buyer Power; Innovation; Slotting Fees; Informative Advertising

Domaines: Économie et finance quantitative [q-fin]

Claire Chambolle, Clémence Christin. New product introduction and slotting fees*. Journal of Industrial Economics, 2021, 69 (2), pp.410-442. ⟨10.1111/joie.12247⟩. ⟨hal-03283867⟩