RT Monograph
SR 00
A1 Bonnet, Céline
A1 Bouamra-Mechemache, Zohra
A1 Richards, Timothy J.
T1 Complementarity and Bargaining Power
YR 2017
FD 2017-03
VO 16-772
SP 44
K1 Bargaining power
K1 complementary goods
K1 Nash-in-Nash equilibrium
K1 retailing
K1 soft drinks
K1 vertical relationships
AB 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.
T2 TSE Working Paper
PB TSE Working Paper
PP Toulouse
AV Published
LK https://publications.ut-capitole.fr/id/eprint/23197/
UL http://tse-fr.eu/pub/31531