Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/41420
Authors: 
Inderst, Roman
Wey, Christian
Year of Publication: 
2010
Series/Report no.: 
DICE discussion paper 01
Abstract: 
This paper studies the impact of buyer power on dynamic efficiency. We consider a bargaining model in which buyer power arises endogenously from size and may impact on a supplier's incentives to invest in lower marginal cost. We challenge the view frequently expressed in policy circles that the exercise of buyer power stifles suppliers' incentives. Instead, we find that the presence of larger buyers keeps a supplier 'more on his toes' and induces him to improve the competitiveness of his offering, in terms of both price and quality, relative to buyers' alternative options.
Subjects: 
Buyer Power
Countervailing Power
Dynamic Efficiency
ISBN: 
978-3-86304-000-0
Document Type: 
Working Paper

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