This article bridges monopoly, monopsony, and countervailing power theories to analyze their welfare implications in a vertical supply chain. We develop a bilateral monopoly model with bargaining that accommodates upstream monopsony and downstream monopoly power. In equilibrium, the...

Our article investigates the impact of vertical integration (without foreclosure) on innovation. We compare cases where either (i) two manufacturers or (ii) a manufacturer and a vertically integrated retailer invest. Then, the independent manufacturer(s) and the retailer bargain over non-linear...

Our article investigates the impact of vertical integration (without foreclosure) on innovation. We compare cases where either (i) two manufacturers or (ii) a manufacturer and a vertically integrated retailer invest. Then, the independent manufacturer(s) and the retailer bargain over non-linear...

This article presents recent advances in the analysis of buyer-seller networks, with a particular focus on the role of buyer power on exclusion. We first examine simple vertical structures and highlight that either upstream or downstream firms may have incentives to engage in exclusionary...

We consider a downstream oligopoly model with one dominant and several fringe retailers who purchase a manufacturing product from a monopoly supplier. We examine how contract type influences the relationship between the dominant retailer's bargaining power and the equilibrium retail price. If...

This paper analyzes the effectiveness of government subsidies in promoting product diversity when a downstream firm has buyer power. Using an extension of the Dixit-Stiglitz model of monopolistic competition, we compare the effects of subsidies on the equilibrium number of differentiated...

We re-examine the “buyer power” defense to horizontal mergers using models of imperfect competition in which input prices are set before goods prices. We derive a measure of unilateral incentives to adjust input prices after a downstream merger, Input Pricing Pressure, and we use it to show...

Taxing internationally mobile factors of production has been dismissed as an inefficient means of raising tax revenue. This paper addresses the question of whether it is efficient to tax capital at source when labor markets and the taxation of lumpsum income suffer from imperfections. Four...

In this note, we investigate the causal link between market concentration and markups in a retail setting. We study the Washington retail cannabis industry, which features exogenous variation in market concentration that resulted from retail licenses being awarded via lotteries. We observe...

Buyer power effects in competition law remain a relatively unexplored area of the literature and practice. Even more scarce are concentration cases—instances in which the ability of a buyer to decrease the prices it pays for a good by withholding demand or through bargaining tactics play a...

We develop a unified theory of exclusive dealing and exclusionary bundling. In a framework with two competing manufacturers which supply their product(s) through a monopolist retailer, we show that buyer power restores the profitability of such practices involving inefficient exclusion. The...

Buyer power has long been a neglected issue in antitrust law. Thanks to Bert Foer and others, however, that has changed. In the last two decades, studies have shown that monopsony power is a widespread problem, particularly in labor markets, and challenges to anticompetitive conduct by buyers...

Competition policy regime in Africa is developing at a heightened speed as countries establish and strengthen both their legal and institutional framework. This calls for continuous legal education, research and development in competition law and policy for competition lawyers and practitioners...

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 sufficiently low. Using the presence of retail price recommendations as the proxy...

Buyer power may provide a countervailing force to enhanced seller power, and unless it leads to successive power, it may lead to lower prices in the downstream market. However, buyer power may also be socially detrimental when it is not in the presence of strong seller power. In that case it may...

We estimate the effects of hospital mergers, using detailed data containing medical supply transactions (representing 23 percent of operating costs) from a sample of US hospitals 2009-2015. Pre-merger price variation across hospitals (Gini coefficient 7 percent) suggests significant...

This article provides a new rationale for the "leverage theory" of bundling in vertical markets. We analyze a framework with a capacity-constrained retailer and uncover that buyer power explains the emergence of bundling practices by a multi-product manufacturer to foreclose a more efficient...

Buyer power in input markets, and in particular labour markets, have received the attention of the press, antitrust authorities and scholars in the recent past. Anticompetitive behaviour by global technology giants is an ongoing concern. A combination of the two raises serious issues. This paper...

We re-consider the bilateral bargaining problem of a multi-product, manufacturer-retailer trading relationship. O'Brien and Shaffer (Rand JE 35:573-598, 2005) have shown that the unbundling of contracts leads to downward distorted production levels if seller power is strong, while otherwise the...

We estimate the effects of horizontal mergers on marginal cost efficiencies - an ubiquitous merger justification - using data containing supply purchase orders from a large sample of US hospitals 2009-2015. The data provide a level of detail that has been difficult to observe previously, and a...

We estimate the effects of horizontal mergers on marginal cost efficiencies – an ubiquitous merger justification – using data containing supply purchase orders from a large sample of US hospitals 2009-2015. The data provide a level of detail that has been difficult to observe previously, and...

In order to take appropriate and effective actions against anticompetitive behaviors in the agricultural sector, it is essential to understand the interaction between buyer power in agricultural procurement and seller power in food retailing and the optimal allocation of anti-trust efforts...

Buyer power once featured prominently in the antitrust discourse, often used as a foil to arguments that a merger would enable supracompetitive pricing. As time passed, the utility of the market power argument diminished as agencies became more explicit in their guidance and began exploring the...

Concerns about market power and competition in the agri-food sector are widespread, with commentators regularly suggesting that farmers are in a structurally weaker position than other actors, who therefore benefit at their expense. The evidence reviewed in this paper indicates that downstream...

Consumers? participation in regulatory decision-making in infrastructure sectors can be critical to ensure effective regulatory governance. Providing avenues for enabling consumers? voice in the regulatory process expands the information base available to regulators in their decision-making, and...