| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Buyer Market Power and Vertically Differentiated Retailers
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| Autores: |
Wang, Shinn-Shyr
Rojas, Christian
Lavoie, Nathalie
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| Data: |
2010-02-03
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| Ano: |
2010
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| Palavras-chave: |
Buyer market power
Vertical differentiation
Wal-Mart
Agribusiness
Agricultural and Food Policy
Agricultural Finance
Community/Rural/Urban Development
Crop Production/Industries
Farm Management
Financial Economics
Food Security and Poverty
Industrial Organization
Marketing
D43
L13
L81
M31
Q13
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| Resumo: |
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 (i.e. quality). Second, the presence of a large retailer causes consumer welfare to increase. There are, however, two reasons for the increase in consumer welfare: consumers gain from the large retailer’s low price (because the upstream discount is partially passed on to the retail price) as well as from the high quality level offered by the traditional retailer. Contrary to the conventional wisdom most of the consumer welfare gains seem due to the latter. The intuition for this result is that price competition softens substantially as a result of firms’ quality differentiation. We also investigate the effects of buyer market power on retail and wholesale prices as well as on producer welfare.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
http://purl.umn.edu/57165
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| Relação: |
University of Massachusetts, Amherst>Department of Resource Economics>Working Paper Series
Working Paper
2010-1
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| Formato: |
34
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