Buyer Market Power in UK Food Retailing

The potential existence of buyer market power in UK food retailing has attracted the scrutiny of the UK's anti-trust authorities, culminating in the decision to launch the second of two comprehensive regulatory inquiries in recent years. Throughout, detection of buyer power has been dogged by the paucity of reliable evidence of its existence. In this paper we present a simple theoretical model of oligopsony which delivers quasireduced form retailer-producer pricing equations in which the presence of market power can be detected using readily available market data. Using a cointegrated vector autoregression, we find empirical results that are consistent with the presence of oligopsony power in all six food products investigated.


Issue Date:
2007-11
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/46007
Total Pages:
22
Series Statement:
Working Paper
22




 Record created 2017-04-01, last modified 2017-09-17

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