Buyer Power seminar at BECCLE               

Last week we had the pleasure to host at BECCLE a seminar on Buyer Power/Monopsony by Professor Lars Henrinksson (http://www.hhs.se/Search/Person/Pages/Person.aspx?PersonID=162) 

with some comments made by Professor Tommy Staahl Gabrielsen, one of the leaders at BECCLE.

Some interesting comments and/or remarks made during the seminar:

• Antitrust legislation should be legally acceptable, economically reasonable and administrative workable.
• Is monopsony the exact reverse of monopoly? Are bilateral monopolies (one with a seller and one with a buyer) counteracting each other?
• For Prof. Henriksson a monopsony can have as much detrimental impact in the economy as a monopoly.
• Benefits of purchaser power: lowering consumer prices, better conditions of supply, could be good for consumers if benefits are passed to them and increase of bargaining power.
• Drawbacks of purchaser power: can be a cartel in disguise. There is risk of tacit coordination/collusion. Rivalry in the downstream market may deteriorate. Water bed effect increasing prices for the rivals.
• In law buyer power is used both as a defence and complaint argument. This can produce a circular argumentation.
• Small players can team up in order to acquire purchaser power.
• There is a need to deal with countervailing power at an early stage to avoid escalation on the problems.

Does this ring a bell to anyone?!

Comments by Tommy Staahl Gabrielsen:

• Purchaser power may lead to lower prices to consumers.
• Theories of harm.
• The reduction of the seller’s power increases buyer’s power as it is only one “cake”.
• Reducing purchaser power will hurt the consumers in the long run. The alternative, giving the power to the seller, is worse.