Journal of the Operational Research Society

, Volume 51, Issue 2, pp 221–230 | Cite as

An option-pricing look at the introduction of private labels

  • I Horowitz
Theoretical Paper

Abstract

This paper uses an option-pricing model to explore the impact of various factors on whether and when a retailer will choose to introduce a private label in a product category that is currently the exclusive domain of a manufacturer. Among the factors considered are the retailer's and manufacturer's margins, the cost of introducing the private label, the shelf space to be devoted to the private label and by consequence the store-market share to be captured by it, and the quality of the private label.

Keywords

private labels option pricing decision analysis 

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Copyright information

© Operational Research Society 2000

Authors and Affiliations

  • I Horowitz
    • 1
  1. 1.University of Florida and City University of Hong Kong

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