The Limits of Buyer Power
- This paper studies the behavior of buyers confronting an incumbent monopolist and a potential market entrant in a repeated trade situation. In the experiment, buyers have two possibilities to demand lower prices in future trade periods. First, they can withhold demand. Second, they can voluntarily pay a higher price to the entrant in order to encourage future re-entry. Both these forms of buyer behavior occur in the experiment. They are less frequent when the number of buyers is large as opposed to small. A control treatment tests to what extent such behavior can be attributed to strategic motives.
| Author details: | Lisa Verena BruttelORCiDGND |
|---|---|
| DOI: | https://doi.org/10.1561/105.00000082 |
| ISSN: | 2326-6198 |
| ISSN: | 2326-6201 |
| Title of parent work (English): | Review of Behavioral Economics |
| Subtitle (English): | Experimental Evidence |
| Publisher: | Now Publishers inc. |
| Place of publishing: | Hannover |
| Publication type: | Article |
| Language: | English |
| Date of first publication: | 2018/09/13 |
| Publication year: | 2018 |
| Release date: | 2022/03/17 |
| Tag: | Buyer Power; Experiment; Market Entry |
| Volume: | 5 |
| Issue: | 2 |
| Number of pages: | 19 |
| First page: | 149 |
| Last Page: | 167 |
| Funding institution: | German Research Foundation (DFG)German Research Foundation (DFG) [BR 4180/1-1] |
| Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften |
| DDC classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
