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Bonnet, Céline
, Bouamra-Mechemache, Zohra and Richards, Timothy J.
(2018)
Complementarity and Bargaining Power.
European Review of Agricultural Economics, 45 (3).
pp. 297-331.
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Abstract
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.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | 2018 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Bargaining power, complementary goods, Nash-in-Nash equilibrium, retailing, soft drinks, vertical relationships |
| JEL Classification: | D43 - Oligopoly and Other Forms of Market Imperfection L13 - Oligopoly and Other Imperfect Markets M31 - Marketing |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 16 May 2018 14:37 |
| Last Modified: | 02 Apr 2021 15:57 |
| OAI Identifier: | oai:tse-fr.eu:32224 |
| URI: | https://publications.ut-capitole.fr/id/eprint/25770 |
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Complementarity and Bargaining Power. (deposited 17 Mar 2017 15:14)
- Complementarity and Bargaining Power. (deposited 16 May 2018 14:37) [Currently Displayed]
