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Buyer Group and Buyer Power When Sellers Compete

Jeon, Doh-Shin and Menicucci, Domenico (2014) Buyer Group and Buyer Power When Sellers Compete. TSE Working Paper, n. 14-543, Toulouse

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We study how the formation of a buyer group affects buyer power when sellers compete and buyers operate in separate markets. Previous research (Inderst and Shaffer, 2007, and Dana, 2012) has considered a buyer group that can commit to an exclusive purchase and has found that the formation of a buyer group strictly increases buyer power unless buyers have identical preferences. In contrast, we assume that no commitment to exclusive purchases is possible. We find that the formation of a buyer group has no effect if each seller's cost function is concave. If it is strictly convex, the buyer group strictly reduces the buyers'total payoff as long as the Pareto-dominant equilibrium for sellers is played when a buyer group is formed.

Item Type: Monograph (Working Paper)
Language: English
Date: 26 November 2014
Place of Publication: Toulouse
Uncontrolled Keywords: Buyer Group, Buyer Power, Competition in Non-linear Tariffs, Discriminatory Offers, Common Agency
JEL Classification: D4 - Market Structure and Pricing
K21 - Antitrust Law
L41 - Monopolization; Horizontal Anticompetitive Practices
L82 - Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 16 Mar 2015 14:53
Last Modified: 23 May 2019 10:30
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