We examine the implications of different ways in which downstream firms can exercise buyer power over their upstream suppliers. We derive several variations of a model in which two upstream firms supply a differentiated product under exclusive contracts to two downstream firms which compete in prices in the retail market. We begin with a benchmark model (upstream first-mover pricing), and then compare its outcomes with those of models that feature different modes of exercising buyer power: downstream first-mover pricing; Nash Bargaining with linear and two-part tariffs; and vertical integration. We rank these five regimes in terms of wholesale and retail prices, social welfare, the pass-through rates of changes in upstream costs, and downstream firms’ profits. We show under what conditions more powerful downstream firms benefit consumers by exercising ‘countervailing power’ against upstream suppliers. We also show that the lump-sum component of the two-part tariff can go in either direction (a slotting allowance or a franchise fee), depending in a very precise way only on parameters representing bargaining power and the degree of product differentiation. Exactly the same configuration of these parameters is shown to determine the ranking of wholesale and retail prices, pass-through rates, and downstream profits, as between the Nash Bargaining regimes with linear and two-part tariffs. Finally, we show that downstream firms which possess buyer power always prefer vertical arrangements that are socially sub-optimal.

我们研究了下游企业对其上游供应商行使买方权力的不同方式的影响。我们得出了模型的几种变体，其中两个上游公司根据独家合同向两个下游公司提供差异化​​产品，这两个下游公司在零售市场上进行价格竞争。我们从基准模型（上游先发定价）开始，然后将其结果与具有不同行使买方权力模式的模型的结果进行比较：下游先发定价；线性和两部分关税的纳什讨价还价；和垂直整合。我们从批发和零售价格、社会福利、上游成本变化的传导率以及下游企业利润等方面对这五个机制进行了排名。我们展示了在什么条件下更强大的下游企业通过对上游供应商行使“反补贴力量”来使消费者受益。我们还表明，两部分关税的一次性支付部分可以朝任一方向发展（进场费或特许经营费），仅以非常精确的方式取决于代表议价能力和产品差异化程度的参数。这些参数的配置完全相同，可以确定批发和零售价格、传递率和下游利润的排名，与线性关税和两部分关税的纳什讨价还价制度之间的情况相同。最后，我们表明，拥有买方力量的下游企业总是更喜欢社会次优的垂直安排。