IDEAS home Printed from https://ideas.repec.org/a/oup/erevae/v45y2018i3p297-331..html

Complementarity and bargaining power

Author

Listed:
  • Timothy J Richards
  • Celine Bonnet
  • Zohra Bouamra-Mechemache

Abstract

Bargaining power in vertical channels depends critically on the ‘disagreement profit’ or the opportunity cost to each player should negotiations fail. In a multiproduct context, disagreement profit depends on the degree of substitutability among the products offered by the downstream retailer. We develop an empirical framework that is able to estimate the effect of retail complementarity on bargaining power, and margins earned by manufacturers and retailers in the French soft-drink industry. We show that complementarity increases the strength of retailers’ bargaining position, so their share of the total margin increases by almost 28 per cent relative to the no-complementarity case.

Suggested Citation

  • Timothy J Richards & Celine Bonnet & Zohra Bouamra-Mechemache, 2018. "Complementarity and bargaining power," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(3), pages 297-331.
    • Handle: RePEc:oup:erevae:v:45:y:2018:i:3:p:297-331.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/erae/jbx032
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ulrich Heimeshoff & Gordon J. Klein, 2024. "Brand strategies: Enhancing manufacturers' bargaining power in grocery retail through cross‐category complementarities," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2484-2500, June.
    2. Timothy J. Richards & Gordon J. Klein & Celine Bonnet & Zohra Bouamra-Mechemache, 2020. "Strategic Obfuscation and Retail Pricing," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(4), pages 859-889, December.
    3. MacDonald, James M. & Dong, Xiao & Fuglie, Keith O., 2023. "Concentration and Competition in U.S. Agribusiness," Economic Information Bulletin 337566, United States Department of Agriculture, Economic Research Service.
    4. Alessandro Bonanno & Carlo Russo & Luisa Menapace, 2018. "Market power and bargaining in agrifood markets: A review of emerging topics and tools," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 6-23, December.
    5. Matsumoto, Tomoki & Kamai, Tomohito & Kanazawa, Yuichiro, 2024. "Examining bargaining power in the distribution channel under possible price pass-through behaviors of retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    6. Richards, Timothy J. & Rutledge, Zachariah, 2022. "Agricultural Labor and Bargaining Power," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322101, Agricultural and Applied Economics Association.
    7. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:erevae:v:45:y:2018:i:3:p:297-331.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.