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Cournot vs. Bertrand under centralised bargaining

Debasmita Basak

Economics Letters, 2017, vol. 154, issue C, 124-127

Abstract: We revisit the debate on Cournot and Bertrand profit comparison in a vertically related upstream market for inputs. We find that when an input pricing contract is determined through centralised bargaining, the final goods producers earn higher (lower) profit under quantity competition than under price competition if the goods are substitutes (complements). Our results are strikingly different to the ones obtained from a similar comparison in other vertical pricing models.

Keywords: Bargaining; Bertrand; Cournot; Centralised bargaining; Vertical pricing; Welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 L14 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:154:y:2017:i:c:p:124-127

DOI: 10.1016/j.econlet.2017.02.031

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