Buyer Power and Information Sharing
Kim I.K. Nora V.
2022Seoul National University,Institute of Economic Research
Seoul Journal of Economics
2022#35Issue 3261 - 290 pp.
We examine how buyer power affects the incentives of producers to share information with retailers. First, we develop a theoretical model suggesting that increasing buyer power will discourage information sharing between producers and retailers. Second, we test this prediction by adopting the idea that recommended retail prices (RPRs) serve as an information-sharing device between manufacturers and retailers. Using manually collected information on RPRs for certain grocery products in Korea, we find that the more the sales of a product rely on powerful retailers, the less likely manufacturers will recommend prices. As revealing information can increase industry profits, our analysis highlights potential inefficiencies from the rise of powerful retailers
Buyer power , Information disclosure , Retail industry , Retail price recommendation
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School of Economics and Trade, Kyungpook National University, Daegu, 41566, South Korea
Department of Economics, Nazarbayev University, Kazakhstan
School of Economics and Trade
Department of Economics
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