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Caprice, Stéphane
and Rey, Patrick
(2012)
Buyer power from joint listing decision.
TSE Working Paper, n. 12-294, Toulouse
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Abstract
We show that collective bargaining can enhance retailers’ buying power vis-àvis
their suppliers. We consider a model of vertically related markets, in which
an upstream leader faces a competitive fringe of less efficient suppliers and negotiates secretly with several firms that compete in a downstream market. We allow downstream firms to join forces in negotiating with suppliers, by creating a buyer group which selects suppliers on behalf of its members: each group member can then veto the upstream leader’s offer, in which case all group members turn to the fringe suppliers. Transforming individual listing decisions into a joint listing decision makes delisting less harmful for a group member; this, in turn enhances the group members’ bargaining position at the expense of the upstream leader. We also show that this additional buyer power can have an ambiguous impact on the upstream leader’s incentives to invest.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | April 2012 |
| Place of Publication: | Toulouse |
| JEL Classification: | D43 - Oligopoly and Other Forms of Market Imperfection L13 - Oligopoly and Other Imperfect Markets L22 - Firm Organization and Market Structure - Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:25 |
| Last Modified: | 02 Apr 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:25765 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15259 |
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