Vertical Bargaining and Countervailing Power

• 成果类型: Article
• 署名作者: Iozzi, Alberto; Valletti, Tommaso
• 署名单位: University of Rome Tor Vergata; University of London; University of London School Oriental & African Studies (SOAS); Imperial College London
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.6.3.106
• 发表日期: 2014
• 页码: 106-135
• 关键词: quantity competition; price-discrimination; mergers

摘要

We study a set of bilateral Nash bargaining problems between an upstream input supplier and several differentiated but competing retailers. If one bilateral bargain fails, the supplier can sell to the other retailers. We show that, in a disagreement, the other retailers' behavior has a dramatic impact on the supplier's outside options and, therefore, on input prices and welfare. We revisit the countervailing buyer power hypothesis and obtain results in stark contrast with previous findings, depending on the type of outside option. Our results apply, more generally, to the literature that incorporates negotiated input prices using bilateral Nash bargaining.