Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168362
Authors: 
Baye, Irina
von Schlippenbach, Vanessa
Wey, Christian
Year of Publication: 
2017
Series/Report no.: 
DICE Discussion Paper 27
Abstract: 
We analyze how consumer preferences for one-stop shopping affect the (Nash) bargaining relationships between a retailer and its suppliers. One-stop shopping preferences create 'demand complementarities' among otherwise independent products which lead to two opposing effects on upstream merger incentives: first a standard double mark-up problem and second a bargaining effect. The former creates merger incentives while the later induces suppliers to bargain separately. When buyer power becomes large enough, then suppliers stay separated which raises final good prices. We also show that our result can be obtained when wholesale prices are determined in a non-cooperative game, under two-part tariffs and when products are substitutable.
Subjects: 
One-Stop Shopping
Buyer Bower
Upstream Merger
JEL: 
L12
L22
L42
ISBN: 
978-3-86304-026-0
Document Type: 
Working Paper

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