We analyze a vertical structure with an upstream monopoly and two downstream retailers. Demand is uncertain but each retailer receives an informative private signal about the state of the demand. We construct an incentive compatible and ex ante balanced mechanism which induces the retailers to...

Full paper is available at: "https://ssrn.com/abstract=3452497" https://ssrn.com/abstract=3452497Supplemental Material to the article "Buyer Alliances in Vertically Related Market". I first develop a model of vertical relationships that provides theoretical grounds for the status quo effect and...

Supplement is available at: "https://ssrn.com/abstract=3452506" https://ssrn.com/abstract=3452506Alliances of buyers to negotiate input prices with suppliers are commonplace. Using pre- and post-alliances data on household purchases of bottled water, I develop a structural model of bilateral...

The paper investigates how competition between two multiproduct downstream firms in vertical relationships affects horizontal relationships: competitor collaboration and performance difference. When the upstream market consists of exclusive suppliers, the efficient firm may have incentive for...

It is well-known that a seller imposed non-discrimination clause can soften downstream price competition by constraining opportunistic pricing behavior on the part of an upstream monopolist seller. But what about about market settings in which there exists a pivotal buyer? We show that in the...

Using two-part tariff under mutual outsourcing between symmetric downstream firms, we demonstrate endogenous choice of vertical structure with each exclusive channel. Recent market structure captures that the mutual outsourcing has become a common business practice in technology intensive...

Despite what we learn in law school about the “meeting of the minds,” most contracts are merely boilerplate -- take-it-or-leave-it propositions. Negotiation is nonexistent; we rely on our collective market power as consumers to regulate contracts’ content. But boilerplate imposes certain...

We study a common agency problem in which two downstream firms, who are local monopolists and receive private demand signals, offer secret menus of two-part tariff contracts to their common supplier. While direct communication is not possible, they may still exchange their information through...

Our article investigates the impact of vertical integration (without foreclosure) on innovation. We compare cases where either (i) two manufacturers or (ii) a manufacturer and a vertically integrated retailer invest. Then, the independent manufacturer(s) and the retailer bargain over non-linear...

In this paper we show that, in the presence of buyer and seller power, a monopolist can enter into a costly contractual relationship with a low-quality supplier with the sole intention of improving its bargaining position relative to a high-quality supplier, without ever selling the good...