Will managerial delegation impede upstream collusion?

We investigate the collusive incentive for far-sighted manufacturers selling via managerial retailers. In contrast to the existing literature, we find that revenue delegation can impede upstream collusion in Bertrand models. This happens due to market exit in the deviation phase when products are close substitutes. The result of managerial delegation hindering upstream collusion is robust if we allow manufacturers to consider partial collusion. Furthermore, we show that less intensified downstream competition does not always harm consumers. If upstream collusion is less sustainable with managerial retailers, consumers can be better-off.