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Cartelization Through Buyer Groups
[article]
2017
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
doi:10.18452/4432
fatcat:xo6uqxioovb3rkoznxpscn4tzm