Buyers’ Alliances for Bargaining Power

Suchan Chae
affiliation not provided to SSRN

Paul Heidhues

December 2003

WZB Markets and Political Economy Working Paper No. SP II 2003-24


We provide a novel explanation as to why forming an alliance of buyers (or sellers) across separate markets can be advantageous when input prices are determined by bargaining. Our explanation helps to understand the prevalence of buyer cooperatives among small and medium sized firms.

Buyers’ Alliances for Bargaining Power

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