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Input Suppliers, Differential Pricing, and Information Sharing Agreements
Author(s) -
Creane Anthony
Publication year - 2008
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2008.00198.x
Subject(s) - differential (mechanical device) , industrial organization , set (abstract data type) , vertical restraints , business , information sharing , work (physics) , microeconomics , economics , computer science , incentive , law , political science , engineering , mechanical engineering , programming language , aerospace engineering
It is common for firms to systematically share information with their input suppliers. Although such agreements with horizontal rivals have been analyzed, there has been little work examining vertical sharing, and that analysis has focused on suppliers that set uniform prices. However, there has been a systematic change in the US policy toward vertical relationships in the past decades: both FTC inaction and courts rulings have curtailed the effect of Robinson‐Patman, a law meant to prevent differential pricing. Furthermore, it is not clear if differential pricing reflects the suppliers' or the buyers' power. The interaction of these effects is examined.