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Buyer Market Power And Vertically Differentiated Retailers, Shinn-Shyr Wang, Christian Rojas, Nathalie Lavoie
Buyer Market Power And Vertically Differentiated Retailers, Shinn-Shyr Wang, Christian Rojas, Nathalie Lavoie
Nathalie Lavoie
We consider a model of vertical competition where downstream firms (retailers) purchase an upstream input from a monopolist and are able to differentiate from each other in terms of quality. Our primary focus is to study the effects of introducing a large retailer, such as a Wal-Mart Supercenter, that is able to lower wholesale prices (i.e. buyer market power). We obtain two main results. First, the store with no buyer market power responds to the presence of the large retailer by increasing its quality, a finding that is consistent with recent efforts by traditional retailers to enhance shoppers’ buying experience …
Buyer Market Power And Vertically Differentiated Retailers, Shinn-Shyr Wang, Christian Rojas, Nathalie Lavoie
Buyer Market Power And Vertically Differentiated Retailers, Shinn-Shyr Wang, Christian Rojas, Nathalie Lavoie
Christian Rojas
We consider a model of vertical competition where downstream firms (retailers) purchase an upstream input from a monopolist and are able to differentiate from each other in terms of quality. Our primary focus is to study the effects of introducing a large retailer, such as a Wal-Mart Supercenter, that is able to lower wholesale prices (i.e. buyer market power). We obtain two main results. First, the store with no buyer market power responds to the presence of the large retailer by increasing its quality, a finding that is consistent with recent efforts by traditional retailers to enhance shoppers’ buying experience …