Reexamination of Bargaining Power in the Distribution Channel under Possible Price Pass-through Behaviors of Retailers

This research aims to gain deeper insight into the determinants of relative power within the distribution channel. We formulate bilateral bargaining under the generalized Nash bargaining but allow for the possibility that the retailers can pass through the price increase to its customer.We bring the proposed framework to a daily scanner-panel data on canned tuna in one retail chain located in Tokyo to investigate the validity of our conjecture. For comparison, we employed formulations by Draganska et al. (2010) to the same data and found without the retailer price pass-through, their bargaining power is estimated much higher