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- Title
THE ROLE OF FIRM SIZE IN BILATERAL BARGAINING: A STUDY OF THE CABLE TELEVISION INDUSTRY.
- Authors
Chipty, Tasneem; Snyder, Christopher M.
- Abstract
We examine the effect of buyer merger on bilateral negotiations between a supplier and n buyers. Merger may have bargaining effects in addition to the usual efficiency effects. The effect of merger on the buyers' bargaining position depends on the curvature of the supplier's gross surplus function: merger enhances (worsens) the buyers' bargaining position if the function is concave (convex). Based on a panel of advertising revenue in the cable television industry, our estimates indicate that the gross surplus function for suppliers of program services is convex. This result suggests that cable operators integrate horizontally to realize efficiency gains rather than to enhance their bargaining position vis-a-vis program suppliers.
- Subjects
BUSINESS negotiation; MERGERS &; acquisitions; COLLECTIVE bargaining; INDUSTRIAL relations; CABLE television; SIZE of industries; ADVERTISING revenue
- Publication
Review of Economics & Statistics, 1999, Vol 81, Issue 2, p326
- ISSN
0034-6535
- Publication type
Article
- DOI
10.1162/003465399558111