This article presents a mechanism design analysis of the optimal wholesale tariff proposed by the monopolistic manufacturer of a branded product to a monopolistic retailer if the retailer also sells a private label whose quality is unobserved by the brand manufacturer. While prior literature had...

This article derives the optimal wholesale tariff that is proposed by the monopolistic manufacturer of a branded product to a monopolistic retailer if the retailer also sells a private label whose quality is unobserved by the brand manufacturer. The focus is on market-share contracts where the...