BUYING POWER AND STRATEGIC INTERACTIONS

This paper shows that buying power at the retail level can lead to a rise in wholesale price. As a result, retailers without buying power may increase their retail price. Nevertheless, total surplus is non-decreasing in the degree of buying power possessed by the 'dominant' retailer.

Subjects

• Purchasing power
• Wholesale trade
• Retail trade

Details

• From
  Canadian Journal of Economics, Nov. 2005, pp.1160-1172