Faculty of Economics and Business Administration Publications Database

Models of Vertical Market Relations

Volume: 28
Number: 4
Pages: 341 - 344
Month: July
ISSN-Print: 0167-7187
Link External Source: Online Version
Year: 2010
Keywords: Vertical contracting; Buyer power; Foreclosure
Abstract: I contrast various models of vertical contracting that view upstream interactions either through the lenses of bilateral contracting and negotiations or through the lenses of a “market interface” with uniform contractual terms. Existing models contrast starkly in their policy implications, in particular when imperfect horizontal competition, on either the upstream or the downstream level, interacts with differential buyer power. Depending on industry characteristics, different assumptions on contracting may be appropriate. Even though the quest for an all-encompassing modelling framework seems vain, existing models can still be made more flexible, so as to be of greater practical usage.