Buyer power in international markets |
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| Authors: | Horst Raff |
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| Institution: | a Institut für Volkswirtschaftslehre and Kiel Institute for the World Economy, Christian-Albrechts-Universität zu Kiel, 24098 Kiel, Germany
b Department of Economics, 8888 University Drive, Simon Fraser University, Burnaby BC, Canada V5A 1S6 |
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| 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. |
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| Keywords: | F12 F15 L13 |
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