This paper studies the exertion of market power in large buyer groups confronting an incumbent monopolist and a potential market entrant in a repeated trade situation. In the experiment, buyer power can either occur as demand withholding when only the incumbent is present in the market, or it can take the form of buying at higher prices from the entrant in order to foster future re-entry. Compa...

A theoretical framework is constructed to derive general conditions under which increased buyer power weakens or strengthens a supplier’s incentive to innovate. These conditions are then applied to two sets of specific models: one on product innovation and the other on process innovation. The analysis shows that the effects of buyer power depend on the type of innovation, the source of buyer po...

Considering the growing externalisation of strategic activities, the problem of the control of buyersupplier relationships is crucial. Therefore, researchers usually propose modes of control that are adapted to various environments. However, the organisations are often considered as “black boxes” whose goals are unspecified. This paper examines buyer-supplier control configurations that take in...

Buyer cooperatives, buyer alliances, and horizontal mergers are often perceived as attempts to increase buyer power. While prior theoretical and empirical work has emphasized that buyer size can increase buyer surplus, I show that even a small group of buyers with heterogeneous preferences can increase price competition among rival sellers by forming a buyer group and committing to buy exclusiv...

Economists have long recognized the importance of trust, but how can trust be enhanced in a marketplace? We set up a rational expectation model that allows the marketplace to target buyer trusting (via a buyer protection program) and seller trustworthiness (via penalty on cheaters) separately. We show that these two policies have opposite effects on the equilibrium level of trust: buyer protect...

We propose a model of duopolistic dynamic pricing in which a buyer alternates between two sellers for price offers over a finite season. The game ends when the buyer accepts a price offer or the season is over, whichever comes first. Previous research (Granot, Granot, and Mantin 2007) shows that there are successive markdowns in equilibrium when the buyer is myopic; our analysis reveals that a ...

This study develops a joint optimal inventory strategy for both the buyer and the vendor when the expired stocks have salvage value, and are subject to constant rate of deterioration. It is shown numerically that the joint approach results in a significant cost reduction when compared with an individual decision by the buyer. We also observed that although the joint total cost decreases, the bu...

Purpose The purpose of this research is to investigate the causal mechanisms that explain relationship between long-term buyer–supplier and buyer performance. Building on growing body social capital in supply chain management (SCM), authors examine how a achieves superior performance forming enduring partnership with supplier through two different forms embeddedness: dyadic embeddedness externa...

A seller of a nondurable good repeatedly faces a buyer who is privately informed about the position of his demand curve. The seller offers a price in each period. The buyer chooses a quantity given the price. The quantity demanded reveals information about the buyer. An equilibrium is characterized with the feature that buyer types separate completely in the first period. This equilibrium uniqu...