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Review of Industrial Organization

, Volume 36, Issue 3, pp 213–225 | Cite as

Buyer Power and Industry Structure

  • David E. MillsEmail author
Article

Abstract

This paper investigates the exercise of market power by a large buyer who emerges via growth, merger, or group purchasing. It explores the efficiency and redistributive effects of such an event when a competitive fringe of small buyers remains in the market. Terms of trade, including those for small buyers, depend on structural conditions on the supply side of the market and the nature of interactions between the newly emerged dominant buyer and suppliers. Predicted aggregate welfare effects have implications for antitrust.

Keywords

Antitrust Buyer power Dominant buyer Waterbed effect 

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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of VirginiaCharlottesvilleUSA

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