Sunday, October 3, 2010
Practice question for the final exam
"Slotting fees" are used when a manufacturer pays to buy shelf space, or buy good shelf space, from a retailer. (It may or may not be per unit, which gives you two different cases to analyze.) Supermarkets are a common example. Right now slotting fees are legal but some commentators have suggested they be banned. Work through the analysis of what would happen if they were banned.
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This question has a similar structure with the payola case discussed by Coase (1979), right?
ReplyDelete"Payola in Radio and Television Broadcasting"
Payola is like the slotting fee. So just read it through.