Time: 11:00 am – 12:00 pm
Date: 24th June 2019
Place: Room 3105.
Morgane Guignard – “How Innovation Affects Bargaining and Profit Sharing ?”

Abstract: We study the impact of innovation on the bargaining power of firms vis-à-vis trading partners.
To do so, we use a structural econometric model of demand that accounts for consumer
adoption of innovations over time. We develop a supply model of bilateral bargaining between
manufacturers and retailers and identify how innovation impacts the bargaining position and
profit sharing. Using data on margarine purchasers in France from 2001 to 2009, we focus on
the introduction of two new products with health attributes (anticholesterol and Omega 3 margarines).
Firms strategically introduce these new products to take advantages of the increasing
trend in preferences for healthy products as an attribute of differentiation over standard
margarine. Preliminary results suggest that the introduction of innovation allows suppliers to
obtain a higher share of profits and increase their bargaining ability with respect to retailers.

Organizers:
Alexis Larousse (CREST)
Sponsors:
CREST
Lunch registration:
no registration needed