We analyze vertical contracting between a manufacturer and retailers who have correlated private information. The manufacturer chooses the number of retailers and secretly contracts with each of them. We highlight how the interplay between the manufacturer's incentive to limit retail competition and the presence of asymmetric information shapes the optimal size of the distribution network. We show that a larger distribution network reduces retailers' information rents, and this may induce the manufacturer to choose a number of retailers that exceeds the socially optimal one. We also determine how the manufacturer's technology and the characteristics of demand affect the optimal network size.

我们分析了制造商和零售商之间具有相关私人信息的垂直合同。制造商选择零售商的数量并与每个零售商秘密签订合同。我们强调了制造商限制零售竞争的动机与信息不对称的存在之间的相互作用如何塑造分销网络的最佳规模。我们表明，更大的分销网络会降低零售商的信息租金，这可能会促使制造商选择超过社会最优零售商的数量。我们还确定制造商的技术和需求特征如何影响最佳网络规模。