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Bargaining power in manufacturer-retailer relationships

Listed author(s):
  • Haucap, Justus
  • Heimeshoff, Ulrich
  • Klein, Gordon J.
  • Rickert, Dennis
  • Wey, Christian

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.

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File URL: https://www.econstor.eu/bitstream/10419/88908/1/107_Haucap_Heimeshoff_Klein_Rickert_Wey.pdf
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Paper provided by University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 107.

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Date of creation: 2013
Handle: RePEc:zbw:dicedp:107
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  1. Celine Bonnet & Pierre Dubois & Sofia B. Villas Boas & Daniel Klapper, 2013. "Empirical Evidence on the Role of Nonlinear Wholesale Pricing and Vertical Restraints on Cost Pass-Through," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 500-515, May.
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  8. Stéphane Caprice & Vanessa Schlippenbach, 2013. "One-Stop Shopping as a Cause of Slotting Fees: A Rent-Shifting Mechanism," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(3), pages 468-487, 09.
  9. Walter Beckert, 2011. "Empirical analysis of countervailing power in business-to-business bargaining," CeMMAP working papers CWP32/11, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  10. Céline Bonnet & Vincent Requillart, 2011. "Does the EU sugar policy reform increase added sugar consumption? An empirical evidence on the soft drink market," Health Economics, John Wiley & Sons, Ltd., vol. 20(9), pages 1012-1024, 09.
  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).
  12. Inderst, Roman & Wey, Christian, 2007. "Buyer power and supplier incentives," European Economic Review, Elsevier, vol. 51(3), pages 647-667, April.
  13. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, February.
  14. K. Sudhir, 2001. "Structural Analysis of Manufacturer Pricing in the Presence of a Strategic Retailer," Marketing Science, INFORMS, vol. 20(3), pages 244-264, October.
  15. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
  16. von Schlippenbach, Vanessa & Wey, Christian, 2011. "One-stop shopping behavior, buyer power, and upstream merger incentives," DICE Discussion Papers 27, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
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