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Buyer Power and Information Disclosure

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  • In Kyung Kim

    (Nazarbayev University)

  • Vladyslav Nora

    (Nazarbayev University)

Abstract

We study how buyer power affects producers’ incentives to share information with retailers. Adopting the Bayesian persuasion framework, we show that full information disclosure is optimal only when buyer power is suciently low. Using the presence of retail price recommendations as the proxy for information sharing between producers and retailers, we empirically examine the implication of our model. Consistent with the theory, we find that producers of products whose sales rely more on powerful retailers are less likely to use retail price recommendations

Suggested Citation

  • In Kyung Kim & Vladyslav Nora, 2017. "Buyer Power and Information Disclosure," Working Papers 1707, Nazarbayev University, Department of Economics, revised Feb 2018.
    • Handle: RePEc:naz:wpaper:1707
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    References listed on IDEAS

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    Cited by:

    1. Atakan, Alp & Koçkesen, Levent & Kubilay, Elif, 2020. "Starting small to communicate," Games and Economic Behavior, Elsevier, vol. 121(C), pages 265-296.

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    More about this item

    Keywords

    buyer power; information disclosure; retail industry; retail price recommendation;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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