Buyer Alliances in Vertically Related Markets
Résumé
Alliances of buyers to negotiate input prices with suppliers are commonplace. Using pre- and post-alliances data on bottled water purchases, I develop a structural model of bilateral oligopoly to estimate the effects of three alliances formed by retailers on their bargaining power vis-à-vis manufacturers and the retail prices paid by consumers. The results provide evidence of a countervailing buyer power effect that reduces retail prices by more than 7\%. Exploring determinants of buyer power, I find that demand curvature, retailers' asymmetries, and changes in bargaining abilities play an important role in this countervailing force and the profitability of buyer alliances.
Domaines
Economies et financesOrigine | Fichiers produits par l'(les) auteur(s) |
---|