Downstream Competition and the Effects of Buyer Power

Zhiqi Chen, Hong Ding () and Zhiyang Liu ()
Additional contact information
Hong Ding: Deloitte China
Zhiyang Liu: Shanghai University of Finance and Economics

Review of Industrial Organization, 2016, vol. 49, issue 1, No 1, 23 pages

Abstract: Abstract We examine four variations of a model in which oligopolistic retailers compete in a downstream market and one of them is a large retailer that has its own exclusive supplier. We demonstrate that an increase in the buyer power of the large retailer vis-à-vis its supplier leads to a fall in the retail price and an improvement in consumer welfare. More interestingly, we find that the beneficial effects of an increase in buyer power are large when the intensity of downstream competition is low, with the effects being the largest in the case of downstream monopoly.

Keywords: Buyer power; Competition intensity; Competition policy; Antitrust; L1; L4 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Downstream Competition and the Effects of Buyer Power (2015)
Working Paper: Downstream Competition and the Effects of Buyer Power (2013)
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DOI: 10.1007/s11151-016-9501-8

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