Kiel Working Papers, Kiel Institute for World Economics
No 1431:
Buyer Power in International Markets
Horst Raff and Nicolas Schmitt
Abstract: This paper investigates the implications for international
markets of the existence of retailers/wholesalers with market power. Two
main results are shown. First, in the presence of buyer power trade
liberalization may lead to retail market concentration. Due to this
concentration retail prices may be higher and welfare may be lower in free
trade than in autarky, thus reversing the standard effects of trade
liberalization. Second, the pro-competitive effects of trade liberalization
are weaker under buyer power than under seller power
Keywords: buyer power, retailing, international trade; (follow links to similar papers)
JEL-Codes: F12,; F15,; L13; (follow links to similar papers)
34 pages, June 2008
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