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Bargaining power in manufacturer-retailer relationships

Author

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  • Haucap, Justus
  • Heimeshoff, Ulrich
  • Klein, Gordon J.
  • Rickert, Dennis
  • Wey, Christian

Abstract

Research on bargaining power in vertical relationships is scarce. It remains particularly unclear which factors drive bargaining power between negotiating parties in a vertical structure. We use a demand model where consumer demand determines the total pie of industry profits. Moreover, we apply a bargaining concept on the supply side to analyze how profit is split between retailers and manufacturers. Estimates show that bargaining power can be explained by several decision variables for retailers and manufacturers. Options for both indicate that any analysis of bargaining power has to consider a dynamic view on the relevant parameters.

Suggested Citation

  • Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Bargaining power in manufacturer-retailer relationships," DICE Discussion Papers 107, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  • Handle: RePEc:zbw:dicedp:107
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    References listed on IDEAS

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    11. Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Inter-format competition among retailers: The role of private label products in market delineation," DICE Discussion Papers 101, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
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    Cited by:

    1. Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Inter-format competition among retailers: The role of private label products in market delineation," DICE Discussion Papers 101, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Heimeshoff, Ulrich & Klein, Gordon J., 2013. "Bargaining power and local heroes," DICE Discussion Papers 87, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    3. Bonnet, Céline & Bouamra-Mechemache, Zohra & Richards, Timothy J., 2017. "Complementarity and Bargaining Power," TSE Working Papers 16-772, Toulouse School of Economics (TSE).

    More about this item

    Keywords

    Bargaining Power; Buyer Power; Antitrust; Discrete Choice; Demand Estimation;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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