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Buyer Power and Product Selection in Interlocking Relationships
[Pouvoir d'achat et sélection de produits dans les relations interdépendantes]

Author

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  • Claire Chambolle

    (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Clémence Christin

    (IDEES - Identité et Différenciation de l’Espace, de l’Environnement et des Sociétés - UNICAEN - Université de Caen Normandie - NU - Normandie Université - ULH - Université Le Havre Normandie - NU - Normandie Université - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - CNRS - Centre National de la Recherche Scientifique - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Hugo Molina

    (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We develop a model of interlocking vertical relationships between manufacturers and retailers, where retailers select which product(s) to distribute. We highlight that an incomplete buyer-seller network may arise for two reasons. When retail substitution and buyer power are high, retailers have incentives to differentiate their product assortments to soften downstream competition. When instead retail substitution and buyer power are low, at least one retailer has an incentive to restrict its assortment to extract rents from manufacturers. We use our framework to provide new insights for competition policy, focusing on horizontal mergers and slotting fee practices.

Suggested Citation

  • Claire Chambolle & Clémence Christin & Hugo Molina, 2026. "Buyer Power and Product Selection in Interlocking Relationships [Pouvoir d'achat et sélection de produits dans les relations interdépendantes]," Working Papers hal-05213591, HAL.
    • Handle: RePEc:hal:wpaper:hal-05213591
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-05213591v1
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