Threat of exit as a source of bargaining power

Risque de faillite et pouvoir de marché

Fabian Berges and Claire Chambolle ()
Additional contact information
Fabian Berges: Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: This article analyzes a simple two-period model where two homogenous manufacturers compete to supply a monopolist retailer. The authors show that if manufacturers are vulnerable (i.e if they are likely to exit the market in case of insufficient orders in the first period), they may exploit their threat of exit to capture the whole first period industry profit. Indeed, the retailer will accept to pay the high price to the manufacturers in order to secure upstream competition in the second period. Results are robust under different market structures or contract types.

Keywords: ENTREE SUR LE MARCHE; BARGAINING POWER; MARKET ENTRY; POUVOIR DE NEGOCIATION; RELATIONS VERTICALES; VERTICAL CONTRACT (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in Recherches Economiques de Louvain - Louvain economic review, 2009, 75 (3), pp.353-368. ⟨10.3917/rel.753.0353⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Threat of Exit as a Source of Bargaining Power (2009)
Working Paper: Threat of Exit as a Source of Bargaining Power (2009)
Working Paper: Threat of Exit as a Source of Bargaining Power (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02654192

DOI: 10.3917/rel.753.0353

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().