Vertical Bargaining and Retail Competition: What Drives Countervailing Power?

Abstract

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Vertical relations, opportunism, and welfare

“…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.…”

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

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

“…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.…”

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

“…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.…”