Commitment to commercialization and quality choices in the Champagne wine producer-distributor relationship
Year:
2011
Authors:
Jacques Laye (INRA);
Eric Giraud Héraud (INRA)
Abstract:
We study the interaction in the Champagne wine producer/distributor relationship between the commitment of the producer to commercialization of a low quality wine and the high quality adjustment of the distributor. We show that this commitment can allow the producer to acquire all the prot of the supply chain. However, at equilibrium, the distributor chooses a quality level that is superior to that obtained at the optimum of vertical integration, and manages to get a part of the prot. The results we obtain allow us to analyze the evolution of wine supply chains when a new distributor appears and enters in competition with the producer.
Published in Review Enometrica, March 2011