A carregar...
Publicação
Essays on buyer power and private labels
| Nome: | Descrição: | Tamanho: | Formato: | |
|---|---|---|---|---|
| 545.6 KB | Adobe PDF |
Autores
Orientador(es)
Resumo(s)
In this dissertation, we conduct three theoretical studies with the ultimate purpose of contributing to a better understanding on the welfare consequences of the exercise of buyer power by retailers in vertical markets.
We concentrate on two forms of buyer power enhancement: single sourcing strategies, in which a retail chain purchases simultaneously for more than one store; and introduction of Private Label (PL) products, which reduces the dependence of retailers from National Brand (NB) manufacturers.
First, we provide a formal treatment for the question of whether or not buyer power reduces manufacturers's incentives to engage in product innovation. We show that manufacturers have a (collusive) joint incentive to restrict product variety and that increased buyer power of retailers through single sourcing can work effectively to o¤set this incentive and thus raise product diversity and social welfare.
Second, we develop a theoretical model to study the optimal counter-strategy behaviour of a NB manufacturer who reacts to the introduction of a PL by a retailer, in a context of retail competition. We show that the industry outcome is never socially e¢ cient and that social welfare can even decrease after the introduction of a PL, either because negotiations between the NB manufacturer and the retailer that introduces a PL may collapse or
because exclusive dealing (in the context of PLs) may arise. Furthermore, we find that a ban on exclusive dealing can promote as well as deteriorate social welfare.
Third, we show that o¤ering a cooperative NB advertising plan to retailers can constitute an effective and implementable counterstrategy for a NB manufacturer to ght the expansion of PLs. Indeed, a NB manufacturer can design a prisoner's dilemma that drives rival retailers to accept the plan.
However, the implementation of such a co-op plan is found to be socially detrimental.
ix