Grennan, Matthew2023-05-222023-05-222014-12-012018-06-21https://repository.upenn.edu/handle/20.500.14332/2620In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e.g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability.Originally published in Management Science © 2014 INFORMS This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.2014.2006economicsgame theorybargaining theoryhealthcareindustrial organizationmarket structurefirm strategymarket performancemicroeconomicsmarket pricingBusiness Administration, Management, and OperationsBusiness AnalyticsBusiness IntelligenceEquipment and SuppliesHealth and Medical AdministrationHealth Information TechnologyManagement Sciences and Quantitative MethodsOperations and Supply Chain ManagementOrganizational Behavior and TheoryReport