CORDIS Project
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This project investigates loyalty discount schemes in vertical industries to understand their impact on competition. By analyzing the motivations behind these schemes, the research aims to inform competition policy and distinguish between harmful and benign practices.
Instances of nonlinear pricing in vertical industries typically involves discount schemes where higher volume purchases or those that involve a larger selection of the supplier’s products lead to lower prices.
Some of these discount schemes can generate incentive effects that are often associated with exclusive dealing.
In absence of efficiency rationale these are often seen as potential mechanisms to exclude competitors and therefore carry a negative connotation in competition law.
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