Which buyersupplier strategies on uncertain markets? a multi-agents simulation

The relationship the firm has with its clients and suppliers largely determines the amount of value it is able to capture in the chain (Chatain and Zemsky, 2007; Porter, 1991). Generally, a distinction is made between power- and trust-based buyer-seller relations (Cannon and Jr, 1999) and their relative impact on value appropriation by the focal firm (Lado, Boyd, and Hanlon, 1997). Surprisingly, very little has been said about the impact of market environment on the choice of the best buyer-supplier strategy in terms of value appropriation, even if several studies have shown the organizational advantages of vertical integration or long-term relations in a situation of high uncertainty (Heide and Miner, 1992; Sutcliffe and Zaheer, 1998). The paper precisely proposes to investigate which among different types of buyer-supplier strategies brings more value to the buyer when market uncertainty increases. We rely on a very innovative method of multi-agents simulation based on an in-depth ethnographic observation phase of a real market in France. Some economists have already used such methods to understand the macro functioning of real markets (Härdle and Kirman, 1995). In the strategy and management field, simulations are mainly used for network analysis (Amaral and Uzzi, 2007; Hanaki et al., 2007). Differently, this paper proposes to simulate and analyze buyer-supplier strategies in a micro and concrete market setting. It shows that the margin rate is not the only parameter to consider when choosing a buyer-supplier strategy but that regularity of supply plays an essential role, and that pure loyalty is not necessarily th