TY  - RPRT
CY  - Toulouse
ID  - publications23197
UR  - http://tse-fr.eu/pub/31531
A1  - Bonnet, Céline
A1  - Bouamra-Mechemache, Zohra
A1  - Richards, Timothy J.
Y1  - 2017/03//
N2  - Bargaining power in vertical channels depends critically on the "disagreement profit" or the opportunity cost to each player should negotiations fail. In a multiproduct context, disagreement profit depends on the degree of substitutability among the products offered by the downstream retailer. Horn and Wolinsky (1988) use this fact to argue for the clear importance of complementarity relationships on bargaining power. We develop an empirical framework that is able to estimate the effect of retail complementarity on bargaining power, and margins earned by manufacturers and retailers in the French soft drink industry. We show that complementarity increases the strength of retailers' bargaining position, so their share of the total margin increases by almost 28% relative to the no-complementarity case.
PB  - TSE Working Paper
T3  - TSE Working Paper
KW  - Bargaining power
KW  - complementary goods
KW  - Nash-in-Nash equilibrium
KW  - retailing
KW  - soft drinks
KW  - vertical relationships
M1  - working_paper
TI  - Complementarity and Bargaining Power
AV  - public
EP  - 44
ER  -