Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices

• 成果类型: Article
• 署名作者: Grennan, Matthew
• 署名单位: University of Pennsylvania
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2014.2006
• 发表日期: 2014
• 页码: 3011-3025
• 关键词: economics; game theory; Bargaining theory; Healthcare; Industrial Organization; market structure; Firm strategy; market performance; MICROECONOMICS; market pricing

摘要

In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e. g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer-supplier bargaining, combined with detailed data on prices and quantities at the buyer-supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.2006.