Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79583
Authors: 
Doyle, Chris
Han, Martijn A.
Year of Publication: 
2012
Series/Report no.: 
SFB 649 Discussion Paper 2012-059
Abstract: 
Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to credibly commit to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are then refunded from suppliers to retailers through slotting allowances or rebates. The stability of such an implied cartel depends on the retailers' incentives to secretly source from a supplier outside of the buyer group arrangement at lower input prices. Cheating is limited if retailers sign exclusive dealing or minimum purchase provisions. We discuss the relevancy of our findings for antitrust policy.
Subjects: 
buyer groups
collusion
exclusive dealing
minimum purchase clauses
rebates
JEL: 
K21
L13
L41
L42
Document Type: 
Working Paper

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