Buyer's Monopoly Power Exclusion Strategy Research

As the market concentration of the retail industry continues to increase,retailers are holding consumer preferences and limited shelf space,which has caused retailers to increase their market power both upstream and downstream.Retailers can exercise vertical control over manufacturers,and retailers can exercise buyer power in bargaining with manufacturers.Through reading a large number of documents,this paper constructs a vertical structure model with upstream duopoly and downstream monopoly,and introduces the Bowley(1965)utility function in the model.In the analysis process,product brand differentiation,market power,and bargaining power are regarded as endogenous.This paper study buyer-dominated exclusive dealing with monopoly power,and then find out the conditions and motivation for retailers to adopt exclusive strategies.This article is based on the theory of exclusive dealing and studies the exclusive strategy under the influence of the buyer.Firstly,this paper elaborates the research background of the buyer-led exclusive dealing.Secondly,it introduces the related theories of exclusive dealing and the research results of domestic and foreign scholars.Finally,this paper uses mathematical analysis methods to study exclusive strategies of retailers and mutual agency,and comparative analysis of the profits of various manufacturers under the two strategies and social welfare.Through research,this paper concludes: the motive and effect of exclusive dealing under the monopoly power of the buyer are different from the exclusive dealing dominated by the manufacturer;when the preference of the consumer brand is weak or when most consumers prefer a certain brand,the retailer signs an exclusive agreement with one of the manufacturers is more advantageous than distributing two branded products;if the excluded brand manufacturer has strong bargaining power when negotiating with the retailer,then the retailer will obtain more profit;when the retailer′s profit using exclusive dealing increases,the profits of manufacturers that sign exclusive agreements with retailers will also increase;exclusive dealing under buyer′s monopoly power will reduce retail prices and increase consumer welfare;retailer-led exclusive dealing will reduce the total social welfare.