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New product introduction and slotting fees

Abstract : 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.
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https://halshs.archives-ouvertes.fr/halshs-02884099
Contributor : Clémence Christin <>
Submitted on : Monday, June 29, 2020 - 4:26:27 PM
Last modification on : Friday, February 5, 2021 - 3:57:38 AM

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  • HAL Id : halshs-02884099, version 1

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Clémence Christin, Claire Chambolle. New product introduction and slotting fees. Journal of Industrial Economics, Wiley, In press. ⟨halshs-02884099⟩

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