Equilibrium Contracts In a Bilateral Monopoly with Unequal Bargaining Powers

Dasgupta Siddhartha and Devadoss Stephen

International Economic Journal, 2002, vol. 16, issue 1, 43-71

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. [C71,C78]

Date: 2002
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DOI: 10.1080/10168730200000003

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