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Title: |
Equilibrium Contracts in a Bilateral Monopoly
with Unequal Bargaining Powers |
| Author: |
Dasgupta, Siddhartha; Devadoss, Stephen |
| Author
Affiliation: |
U AR, Pine
Bluff; U ID |
| Source: |
International Economic Journal, Spring 2002, v. 16, no. 1, pp. 43-71 |
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Publication Date: |
Spring 2002 |
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Abstract: |
Real-world bilateral monopolies often
indicate that one party exercises slightly superior bargaining power
than the other party. We analyze long-term, cooperative contracts in
bilateral monopolies with unequal bargaining powers. We assume that the
two parties bargain for a determinate price and quantity of the
intermediate product by optimizing a joint objective which takes into
account the profits and bargaining power of each party. We use a Bowley
price leadership model to develop the multi-period contracts and derive
conditions that induce a Nash equilibrium at the jointly determined
points of operation. |
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