Excessive entry in a bilateral oligopoly

Arijit Mukherjee

Discussion Papers from University of Nottingham, School of Economics

Abstract: In a bilateral oligopoly, Ghosh and Morita (‘Social desirability of free entry: a bilateral oligopoly analysis, 2007, IJIO) show that entry is always socially insufficient if the upstream agents have sufficiently strong bargaining power. We show that this conclusion is very much dependent on the use of “efficient bargaining” model in their analysis. Using a “right-to-manage” model, we show that, even if the upstream agents have full bargaining power, entry is excessive in a bilateral oligopoly if the cost of entry is not very high. Hence, whether the anti-competitive entry regulation is justified under bilateral oligopoly depends on the bargaining structure between the upstream and the downstream agents.

Keywords: Bilateral oligopoly; Excessive entry; Free entry; Insufficient entry (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-mic and nep-reg
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Citations: View citations in EconPapers (2)

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Journal Article: Excessive entry in a bilateral oligopoly (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notecp:08/02

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