Vertical Bargaining and Retail Competition: What Drives Countervailing Power?

Gaudin, Germain

doi:10.2139/ssrn.2655726

Cited by 9 publications

(4 citation statements)

References 62 publications

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“…22 See the web Appendix. 23 The pass-through rates of input prices to retail prices and quantities are provided by Gaudin (2018), when n ≥ 3. 24 In the Appendix, we provide an example with a linear demand system which can be applied to the case where retailers' products are gross complements.…”

Section: Application: Welfare Effects Of Information Exchange Betweenmentioning

confidence: 99%

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Vertical relations, opportunism, and welfare

Gaudin

2019

The RAND J of Economics

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This article revisits the opportunism problem faced by an upstream monopolist contracting with several retailers over secret agreements, when contracts are linear. We characterize the equilibrium under secret contracts and compare it to that under public contracts in a setting allowing for general forms of demand and retail competition. Market distortions are more severe under secret contracts if and only if retailers' instruments are strategic complements. We also investigate the effect of opportunism on firms' profits. Our results remain robust whether retailers hold passive or wary beliefs. We derive some implications for the antitrust analysis of information exchange between firms.

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Section: Application: Welfare Effects Of Information Exchange Betweenmentioning

confidence: 99%

“…The pass‐through rates of input prices to retail prices and quantities are provided by Gaudin (), when

n \geq 3

.…”

mentioning

confidence: 99%

Vertical relations, opportunism, and welfare

Gaudin

2019

The RAND J of Economics

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“…Countervailing buyer power claims that greater retail concentration also increases retailers’ bargaining power as buyers of input and thus induces the price of this input to fall. According to this concept, this decrease in the input price is further passed through to consumers and compensates for the price hike due to heightened market power at the retail level (Gaudin, 2015). Here, we consider fixed costs that are the driving force of the countervailing buyer power.…”

Section: Literature Reviewmentioning

confidence: 99%

Multilayer of Suppliers Fixed Costs and Spatial Competition in the Upstream Market as a Source of Retailers Buying Power

Das

2019

Studies in Microeconomics

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The present study is in the context of the new Model Agricultural Produce Market Committee (APMC) Act 2003, which aims at freedom of farmers to sell their products to the large private firms and bringing reforms in the wholesale ‘cash and carry’ and retail markets in India. The most important suggestions have remarked in the Economic survey 2014–2015 and outlined that state governments should be specially persuaded by the central government to provide policy support for alternative or special markets in the large private sector. Many states, including West Bengal, accepted the proposal and had opened the market for agricultural commodities for the large private sector. In this paper, we study a model of vertical restraints in the case of small farmers in West Bengal, India considering multilayer of fixed costs and monopoly power of the small as well as large traders in the vertical structure. JEL: D8, D43, L13

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“…Caprice and Rey [2015] show that joint delisting decisions increase the bargaining positions of the group's members. 27 This improved bargaining position can put suppliers in a position 25 Unlike work which adopts a linear form of demand, Gaudin [2018] shows that countervailing buyer power arises in equilibrium for a broad class of demand forms, and its magnitude depends on the degree of product differentiation.…”

Section: Efficiency Concerns Related To Exploitative Abuses: Buyer Pomentioning

confidence: 99%

Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?

Bougette¹,

Budzinski²,

Marty³

2019

Revue d'Économie Politique

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Cet article analyse les concepts d’abus d’exploitation et de dépendance économique, non seulement sous le prisme de la jurisprudence concurrentielle européenne mais également sous celui de l’économie industrielle. Bien que les racines théoriques de ces concepts reposent sur la théorie économique, ils ont été ignorés ou peu pris en compte dans le contexte de l’application du droit de la concurrence. Une approche fondée sur les effets ( effects-based ) devrait tenir compte de ces pratiques et pourrait fournir des indications sur la façon d’analyser leurs impacts. Nous nous appuyons sur deux exemples tirés des industries agro-alimentaires et de l’économie numérique. Le présent article souligne l’existence d’un paradoxe : bien que les modèles d’organisation industrielle fournissent des outils pertinents pour caractériser ces abus, évaluer leurs effets et concevoir des mesures correctives, ils demeurent peu utilisés dans la pratique décisionnelle. Classification JEL: K21, L12, L40, L42

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Vertical Bargaining and Retail Competition: What Drives Countervailing Power?

Cited by 9 publications

References 62 publications

Vertical relations, opportunism, and welfare

Vertical relations, opportunism, and welfare

Multilayer of Suppliers Fixed Costs and Spatial Competition in the Upstream Market as a Source of Retailers Buying Power

Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?

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