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
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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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