Working Paper

Buyer Power in International Markets

Authors

  • Horst Raff
  • Nicolas Schmitt
Publication Date

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.

Info

JEL Classification
F12, F15, L13

Key Words

  • buyer power
  • international trade
  • Internationaler Handel
  • retailing