Buyer power and supplier incentives

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Buyer power and supplier incentives

This paper investigates how the formation of larger buyers affects a supplier’s profits and, by doing so, his incentives to undertake non-contractible activities. We first identify two channels of buyer power, which allows larger buyers to obtain discounts. We subsequently examine the effects of buyer power on the supplier’s incentives and on social welfare. Contrary to some informal claims in ...

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This paper investigates how the formation of larger buyers affects a supplier's profits and, by doing so, his incentives to undertake non-contractible activities. We first identify two channels of buyer power, which allows larger buyers to obtain discounts. We subsequently examine the effects of buyer power on the supplier's incentives and on social welfare. Contrary to some informal claims in ...

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COST AND ALLOCATIVE EFFICIENCY IN BUYER-SUPPLIER

The aim of this paper is the evaluation overall performance of buyer-supplier relationships.In some situations the cost of inputs in a buyer-supplier chain are available, on the other hand, achieving a low cost position is necessary for most businesses. And, in a buyer-supplier chain wants to know how assign inputs with the least cost. This paper introduces cost efficiency with same and dierent...

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Completeness, and Buyer-supplier Relationships

The theory of incomplete contracts has been used to study the relationship between buyers and suppliers following the deployment of modern information technology to facilitate coordination between them. Previous research has sought to explain anecdotal evidence from some industries on the recent reduction in the number of suppliers selected to do business with buyers, by appealing to relationsh...

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Supplier Innovation in the Presence of Buyer Power

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...

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ژورنال

عنوان ژورنال: European Economic Review

سال: 2007

ISSN: 0014-2921

DOI: 10.1016/j.euroecorev.2006.02.002