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The countervailing power hypothesis in the dominant firm-competitive fringe model

Charalambos Christou and Konstantinos G. Papadopoulos

Economics Letters, 2015, vol. 126, issue C, 110-113

Abstract: In the dominant firm-competitive fringe model, where firms purchase input from a common supplier via two-part tariff contracts, we demonstrate that countervailing power may be neutral. Unlike Chen (2003), more countervailing power may not lead to lower consumer prices.

Keywords: Countervailing power; Buyer power; Dominant retailer; Competitive fringe; Two-part tariff (search for similar items in EconPapers)
JEL-codes: L11 L12 L13 L14 (search for similar items in EconPapers)
Date: 2015
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Handle: RePEc:eee:ecolet:v:126:y:2015:i:c:p:110-113