Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5058768 | Economics Letters | 2015 | 4 Pages |
Abstract
â¢Correcting for payoffs and outside options in Chen (2003), new results emerge.â¢Countervailing power is neutral in the linear dominant firm-competitive fringe model.â¢Neutrality result is independent of the fringe size.â¢The profits of the dominant retailer never decrease with a rise of his buyer power.
In the dominant firm-competitive fringe model, where firms purchase input from a common supplier via two-part tariff contracts, we demonstrate that countervailing power may be neutral. Unlike Chen (2003), more countervailing power may not lead to lower consumer prices.
Related Topics
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Authors
Charalambos Christou, Konstantinos G. Papadopoulos,