Cost Reducing Strategies

Pau Olivella and M. Pastor

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We analyze an industry where a dominant buyer may foreclose its rivals (with whom competes a la Cournot in the final good market) from access to an efficient supplier of an intermediate good. We prove that the presence of asymmetric information between this dominant buyer and its supplier may mitigate the incentives for the dominant buyer to exert such a vertical restraint. If the dominant buyer's bargaining power is not too strong, the presence of such an informal asymmetry has a positive impact on welfare.

Keywords: INFORMATION; MARKET STRUCTURE (search for similar items in EconPapers)
JEL-codes: D82 L13 L42 (search for similar items in EconPapers)
Pages: 38 pages
Date: 1997
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Journal Article: Cost reducing strategies (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:402.97

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