Buyer Power and Supplier Incentives
Roman Inderst and
Christian Wey ()
No 464, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
This paper argues that - in contrast to an often expressed view - the formation of larger and more powerful buyers need not reduce welfare by stifling suppliers' incentives. If contracts are determined in bilateral negotiations, the presence of larger buyers may both increase suppliers' incentives for product improvement and induce suppliers to choose a more efficient technology. The paper also isolates two different channels by which larger buyers can obtain a discount.
Keywords: Buyer power; Merger; Retailing (search for similar items in EconPapers)
Pages: 27 p.
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Journal Article: Buyer power and supplier incentives (2007)
Working Paper: Buyer Power and Supplier Incentives (2003)
Working Paper: Buyer Power and Supplier Incentives (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp464
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