Vertical integration through Rubinstein bargaining
AbstractWe consider a vertical structure in which an upstream manufacturer bargains with a downstream retailer over the price of an intermediate good. In an alternating offers framework, we show that when the managers of the firms can choose their response time in the negotiation that the solution conforms either to the non-intergrated or fully integrated structure from standard models of successive monopoly.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 3 ()
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bargaining; successive monopoly; asymmetric response times.;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
252, David K. Levine.
- Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, December.
- Admati, Anat R & Perry, Motty, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 345-64, July.
- Hoel, Michael, 1986. " Perfect Equilibria in Sequential Bargaining Games with Nonlinear Utility Functions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(2), pages 383-400.
- Sakovics Jozsef, 1993. "Delay in Bargaining Games with Complete Information," Journal of Economic Theory, Elsevier, vol. 59(1), pages 78-95, February.
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