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The Countervailing Power Hypothesis when Dominant Retailers Function as Sales Promoters

Noriaki Matsushima and Shohei Yoshida ()

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: We consider a downstream oligopoly model with one dominant and several fringe retailers, who purchase a manufacturing product from a monopoly supplier. We then examine how the supplier's outside option influences the relation between the dominant retailer's bargaining power and the equilibrium retail price. If the market demand shrinks due to a breakdown of bargaining between the supplier and the dominant retailer, who works as a sales promoter for the product, there is a negative relation between the bargaining power and the retail price.

New Economics Papers: this item is included in nep-com and nep-mkt
Date: 2016-10, Revised 2017-07
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Journal Article: The Countervailing Power Hypothesis when Dominant Retailers Function as Sales Promoters (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:0981r

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