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Industrial Organization Commons™

Open Access. Powered by Scholars. Published by Universities.®

2014

Oligopoly

Articles 1 - 3 of 3

Full-Text Articles in Industrial Organization

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis Jul 2014

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

State agencies in infant-formula procurement auctions receive lower bids when they are in buyer alliances than when they are unallied. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier by offering a rebate on formula sold through WIC. Agencies frequently join together in buyer alliances. An empirical estimation shows that bids are lower to alliances and that lower prices result because alliances are heterogeneous. Results suggest that when heterogeneity is not controlled, bids decline with alliance size, which has policy …

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Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis Jul 2014

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

State agencies in infant-formula procurement auctions receive lower bids when they are in buyer alliances than when they are unallied. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier by offering a rebate on formula sold through WIC. Agencies frequently join together in buyer alliances. An empirical estimation shows that bids are lower to alliances and that lower prices result because alliances are heterogeneous. Results suggest that when heterogeneity is not controlled, bids decline with alliance size, which has policy …

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Bargaining In Hospital Merger Models, David J. Balan, Keith Brand Jan 2014

Bargaining In Hospital Merger Models, David J. Balan, Keith Brand

David J. Balan

Hospital prices for commercially-insured patients are generally set through bilateral negotiations with health insurance companies. Reflecting common industry practice, contemporary models of hospital/health insurer bargaining usually assume that multi-hospital systems bargain on an all-or-nothing basis. However, hospitals within systems may bargain separately, and a commitment to do so is sometimes put forward as a remedy for an otherwise anticompetitive merger. We analyze and compare the merger-induced changes in equilibrium prices in a Nash Bargaining framework under these two modes of bargaining. We show that, while the magnitude of price effects under either mode depends critically on the degree of pre-merger …

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