Arbeitspapier

Raising rivals' costs through buyer power

We re-examine the view that a ban on price discrimination in input markets is particularly desirable in the presence of buyer power. This argument crucially depends on an inverse relationship between downstream firms' profits and the uniform input price. Assuming different input efficiencies among downstream firms, we derive a necessary and sufficient condition such that a higher input price benefits a subset of relatively efficient downstream firms. In such instances, consumers may be better off if discriminatory pricing is feasible.

ISBN
978-3-86304-161-8
Language
Englisch

Bibliographic citation
Series: DICE Discussion Paper ; No. 162

Classification
Wirtschaft
Oligopoly and Other Imperfect Markets
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Labor Law
Subject
Price discrimination
Buyer Power
Raising Rivals’ Costs

Event
Geistige Schöpfung
(who)
Dertwinkel-Kalt, Markus
Haucap, Justus
Wey, Christian
Event
Veröffentlichung
(who)
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
(where)
Düsseldorf
(when)
2014

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dertwinkel-Kalt, Markus
  • Haucap, Justus
  • Wey, Christian
  • Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Time of origin

  • 2014

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