Multiproduct trading with a common agent under complete information: Existence and characterization of Nash equilibrium
Iván Arribas () and
Journal of Economic Theory, 2017, vol. 167, issue C, 14-38
This paper focuses on oligopolistic markets in which indivisible goods are sold by multiproduct firms to a continuum of homogeneous buyers, with measure normalized to one, who have preferences over bundles of products. By analyzing a kind of extended contract schedule (mixed bundling prices), the paper shows that pure strategy efficient equilibria always exist in such settings. While inefficient equilibria may exist, this can be ruled out by refining the equilibrium correspondence using the concept of subgame perfect Strong equilibrium. In addition, the paper shows that each principal's set of equilibrium contracts of minimum cardinality may contain at least three offers. When the social surplus function is monotone and unit costs are constant, only two offers are required at the equilibrium outcome.
Keywords: Multiproduct price competition; Delegated agency games; Mixed bundling prices; Subgame perfect Nash equilibrium; Strong equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D21 D41 D43 L13 (search for similar items in EconPapers)
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Working Paper: Multiproduct trading with a common agent under complete information: Existence and characterization of Nash equilibrium (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:167:y:2017:i:c:p:14-38
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