Countervailing power and dynamic efficiency

Arbeitspapier

This paper studies the impact of buyer power on dynamic efficiency. We consider a bargaining model in which buyer power arises endogenously from size and may impact on a supplier's incentives to invest in lower marginal cost. We challenge the view frequently expressed in policy circles that the exercise of buyer power stifles suppliers' incentives. Instead, we find that the presence of larger buyers keeps a supplier 'more on his toes' and induces him to improve the competitiveness of his offering, in terms of both price and quality, relative to buyers' alternative options.

Object Details

• ISBN: 978-3-86304-000-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 01

Classification and Topics

• Classification: Wirtschaft
• Subject: Buyer Power ; Countervailing Power ; Dynamic Efficiency ; Nachfragemacht ; Lieferanten-Kunden-Beziehung ; Gegengewichtige Marktmacht ; Wirtschaftliche Effizienz ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Inderst, Roman ; Wey, Christian
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/41420
• Last update: 10.03.2025, 11:43 AM CET