Buyer Power and Information Disclosure

In Kyung Kim and Vladyslav Nora
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In Kyung Kim: Nazarbayev University

No 1707, Working Papers from Nazarbayev University, Department of Economics

Abstract: We study how buyer power affects producers’ incentives to share information with retailers. Adopting the Bayesian persuasion framework, we show that full information disclosure is optimal only when buyer power is suciently low. Using the presence of retail price recommendations as the proxy for information sharing between producers and retailers, we empirically examine the implication of our model. Consistent with the theory, we find that producers of products whose sales rely more on powerful retailers are less likely to use retail price recommendations

Keywords: buyer power; information disclosure; retail industry; retail price recommendation (search for similar items in EconPapers)
JEL-codes: D82 D83 L15 L81 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2017-07, Revised 2018-02
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
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Citations: View citations in EconPapers (1)

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