de la Fuente, Iván ValdésElexpuru, Gonzalo Escobar2024-11-142024-11-142022Desarrollo y Sociedad, Volume 2022, Issue 90, Pages 77 - 109, 20220120-3584https://repositorio.unab.cl/handle/ria/61984Indexación: Scopus.A theoretical model was constructed to investigate the conditions that a large retailer must satisfy to increase the quality of the retailer-owned brands towards a greater number of groceries. The key result shows that the restraint given by a vertical integration scheme (producer-distributor) is relaxed for a higher quality-production cost ratio under the assumption of modelling with endogenous quality. Another finding is that the national brand´s production is not altered, which is explained by the fact that this brand is demanded by consumers with high willingness to pay for it. However, the wholesale price decreases and hence the manufacturer’s profit always falls as the quality of own brands rises. This is consistent with the argument that the retailer improves its negotiation capacity with the private manufacturer when it sells an own brand that is a close substitute for the manufacturer’s label, which always forces the wholesale price of the branded product down. © 2022, Universidad de los Andes, Facultad de Economia. All rights reserved.enFirm strategy and market performanceIndustrial economicsMarket structureIs it rational for a large-retailer to sell an own-brand product similar to the branded product of a large manufacturer? A Vertical Product Differentiation Model¿Es racional para una gran firma minorista vender un producto de marca propia, similar a uno etiquetado de un manufacturero dominante? Un modelo de diferenciación de producto verticalArtículoAttribution-NonCommercial-ShareAlike 4.0 International CC BY-NC-SA 4.0 Deed10.13043/DYS.90.3