 
                                                                                | Article ID: | iaor20104601 | 
| Volume: | 29 | 
| Issue: | 3 | 
| Start Page Number: | 474 | 
| End Page Number: | 482 | 
| Publication Date: | May 2010 | 
| Journal: | Marketing Science | 
| Authors: | Liu Yunchuan, Cui Tony Haitao | 
| Keywords: | distribution | 
This paper studies a manufacturer's optimal decisions on extending its product line when the manufacturer sells through either a centralized channel or a decentralized channel. We show that a manufacturer may provide a longer product line for consumers in a decentralized channel than in a centralized channel if the market is fully covered. In addition, a manufacturer's decisions on the length of its product line may not always be optimal from a social welfare perspective in either a centralized or a decentralized channel. Under certain conditions, a decentralized channel can provide the product line length that is socially optimal, whereas a centralized channel cannot.