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| Author: | Tyagi, R. K. |
| Title: | Why do suppliers charge larger buyers lower prices? |
| Journal: | Journal of Industrial Economics
2001 : MAR, VOL. 49:1, p. 45-61 |
| Index terms: | BUYING PRICING SUPPLIERS |
| Language: | eng |
| Abstract: | The phenomenon of input suppliers charging larger buyer firms, relative to smaller buyer firms, lower prices is commonly explained in terms of supplier economies of scale, supplier competition for larger buyers, and the larger bargaining power of larger buyers. This paper provides an alternative explanation, and shows that the observed direction of differential pricing can benefit the supplier by lowering the level of tacit collusion its buyers can sustain in their output market. |
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