Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92768
Authors: 
Matsushima, Noriaki
Shinohara, Ryusuke
Year of Publication: 
2011
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 808
Abstract: 
The purpose of the paper is to provide a simple model explaining buyer-supplier relationships and show what factors determine the number of trading partners. We show that when the supplier is able to determine the number of trading partners, the optimal number is small if the supplier's bargaining power with them is weak, the economy of scope in the supplier's variable costs is significant, and that in its sunk investment is weak. Investment may be greater when the number of trading partners is small. The results may be consistent with the formation of Japanese buyer-supplier relations.
Subjects: 
buyer
supplier
investment
economies of scope
JEL: 
L14
M11
Document Type: 
Working Paper

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