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On returns policies with exogenous price. (English) Zbl 1159.90301
Summary: We contribute to current research on single-period returns policies by making a clear distinction between models in which transfer price is exogenous and models in which one dominant party unilaterally declares a price. We compare the equilibrium contracts that result from these two approaches and derive conditions for the equilibrium returns policy to be Pareto-efficient when transfer price is exogenous. Our main result is distribution free, but we make some interesting observations on channel performance when demand is uniformly distributed.
MSC:
90B05Inventory, storage, reservoirs
91B38Production theory, theory of the firm (economics)
90B30Production models