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This paper investigates the interaction effects between upstreamcollusion and downstream collusion. Upstream collusion does not depend on whether downstream are acting in collusion or not, and vice versa. Manufacturers' competition can hinder the sustainability of upstream collusion, and retailers' competition has a negative effect on sustaining downstream collusion.
Marketing channel play an important role for the manufacturers and dealers. However, the vertical conflicts and horizontal conflicts happen often. The serious consequence of the channel conflict may lead the product quit the market. Based on the game theory and incentives theory design, this paper discussed the incentive mechanisms to prevent conflicts in market channel.
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