Buyer Power: Economic Theory and Antitrust Policy

Abstract

The objective of this paper is to survey the recent developments in economic theories of buyer power and using the theories as a guide to discuss how antitrust cases involving buyer power can be analysed. An important conclusion that emerges from this survey is that the competition effects of buyer power are quite different depending on whether it is monopsony power against powerless suppliers or countervailing buyer power against large suppliers with market power. A proposed framework of antitrust analysis is presented, and issues related to market definitions and determination of buyer power are discussed.

Citation

Chen, Z. (2007), "Buyer Power: Economic Theory and Antitrust Policy", Zerbe, R.O. and Kirkwood, J.B. (Ed.) Research in Law and Economics (Research in Law and Economics, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 17-40. https://doi.org/10.1016/S0193-5895(06)22002-5