Empirical Analysis of Countervailing Power in Business-to-Business Bargaining

Walter Beckert ()

No 1107, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: This paper provides a comprehensive econometric framework for the empirical analysis of countervailing power. It encompasses the two main features of pricing schemes in business-to-business relationships: nonlinear price schedules and bargaining over rents. Disentangling them is critical to the empirical identification of countervailing power. Testable predictions from the theoretical analysis for a pragmatic reduced form empirical pricing model are delineated. This model is readily implementable on the basis of transaction data, routinely collected by antitrust authorities and illustrated using data from the UK brick industry. The paper emphasizes the importance of controlling for endogeneity of volumes and established supply chains and for heterogeneity across buyers and sellers due to intrinsically unobservable outside options.

Keywords: countervailing power; bargaining; nonlinear prices; transaction panel data countervailing power; bargaining; nonlinear prices; transac¬tion panel data (search for similar items in EconPapers)
JEL-codes: C23 C78 D43 L11 L12 L14 L42 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (1)

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https://eprints.bbk.ac.uk/id/eprint/5972 First version, 2011 (application/pdf)

Related works:
Journal Article: An Empirical Analysis of Countervailing Power in Business-to-Business Bargaining (2018)
Working Paper: Empirical analysis of countervailing power in business-to-business bargaining (2011)
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