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Buyers’ Alliances for Bargaining Power

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Author Info
Suchan Chae
Paul Heidhues

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Abstract

We provide a novel explanation as to why forming an alliance of buyers (or sellers) across separate markets can be advantageous when input prices are determined by bargaining. Our explanation helps to understand the prevalence of buyer cooperatives among small and medium sized firms.

ZUSAMMENFASSUNG - (Verhandlungsmacht durch Käuferkooperationen)
Dieses Papier entwickelt eine neue Erklärung dafür, warum Zusammenschlüsse zwischen Käufern (oder Verkäufern), die in unterschiedlichen Märkten aktiv sind, deren Verhandlungsmacht stärken können. Unser Ansatz kann unter anderem erklären, warum sich kleinere und mittlere Unternehmen oft zu Einkaufsgenossenschaften zusammenschließen.

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File URL: http://skylla.wz-berlin.de/pdf/2003/ii03-24.pdf
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Publisher Info
Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number SP II 2003-24.

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Length: 42 pages
Date of creation: Dec 2003
Date of revision:
Publication status: Published in the Journal of Economics & Management Strategy, Vol. 13(4), Winter 2004, pp. 731-754.
Handle: RePEc:wzb:wzebiv:spii2003-24

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Related research
Keywords: Nash bargaining solution; alternating-offer bargaining; bargaining power; buyer power; cooperatives; input markets.;

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Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Battigalli, Pierpaulo & Fumagalli, Chiara & Polo, Michele, 2006. "Buyer Power and Quality Improvements," CEPR Discussion Papers 5814, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Chiara Fumagalli & Massimo Motta, 2006. "Buyers’ miscoordination, entry, and downstream competition," CSEF Working Papers 152, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  3. Inderst, Roman & Wey, Christian, 2005. "How Strong Buyers Spur Upstream Innovation," CEPR Discussion Papers 5365, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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