 The Strategic Effect of Private Label in a Vertical Bargaining ModelLi Tian and Ronald Cotterill (ron@cotterilleconomics.com) No 100, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy Abstract: Private label products have been studied extensively and theoretical frameworks were developed to show private label products lend their retailers bargaining power over factory brands. Because of unobservable factory or wholesale prices empirical evidence has been lacking. This paper, using an efficient bargaining model in a multilateral bargaining setup and IRI brand level data, provides for the first time empirical evidence supporting the existence of such bargaining power by retailers with strong private labels. Estimation results show that the retailers in the Boston fluid milk market are able to leverage their private label products to gain concessions when negotiating wholesale prices with two major factory brands. This suggests that the relationship between retailers and milk processors is competitive even though the retailers enjoy channel power. Keywords: private label; efficient bargaining; market channel; fluid milk (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:100 Access Statistics for this paper More papers in Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy Contact information at EDIRC. |
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