Posted by D. Daniel Sokol
Chris Doyle (RBB Economics) and Martijn A. Han (Humboldt University) analyze Cartelization Through Buyer Groups
ABSTRACT: Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to credibly commit to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are then refunded from suppliers to retailers through slotting allowances or rebates. The stability of such an “implied cartel” depends on the retailers’ incentives to secretly source from a supplier outside of the buyer group arrangement at lower input prices. Cheating is limited if retailers sign exclusive dealing or minimum purchase provisions. We discuss the relevancy of our findings for antitrust policy.
Featured News
Geradin Partners Expands Paris Office with Key Hire
Aug 30, 2024 by
CPI
Judge Accuses Google of ‘Clear Abuse’ in Antitrust Case Over Deleted Employee Chats
Aug 29, 2024 by
CPI
Hong Kong Cleaning Company Employee Charged in Historic Antitrust Investigation Case
Aug 29, 2024 by
CPI
Inside the Yelp Suit: Allegations of Google’s Abuse of Search Power
Aug 29, 2024 by
CPI
AI Safety Bill Clears Hurdle in California, Heads to Governor’s Desk
Aug 29, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – State Attorneys General
Aug 22, 2024 by
CPI
CPI Talks… …With Attorney General Phil Weiser
Aug 22, 2024 by
CPI
The Bipartisan Miracle of State Antitrust Enforcement
Aug 22, 2024 by
Gwendolyn J. Lindsay Cooley
Recent Developments in State Antitrust Enforcement: Agriculture and Food Markets
Aug 22, 2024 by
Elizabeth R. Odette
State Attorneys General: Stewards of Consumer Health and Welfare
Aug 22, 2024 by
Brooke Howlett Lovrovich