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Schemat arbitrażowy Nasha, a podział zysków w bilateralnym monopolu kopalni węgla brunatnego i elektrowni. Cześć druga – zastosowania w negocjacjach strategicznych i taktycznych
[Nash bargaining solution and the split of profit in bilateral monopoly of lignite opencast mine and power plant. Part two – applications in strategic and tactical negotiations]

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  • Jurdziak, Leszek

Abstract

The application of Nash bargaining solution to profit division in negotiation between opencast lignite mine and power plant has been discussed. Different proposals of status quo point usage and ways of its determination for profit sharing both in strategic and tactical/operational negotiation have been presented. The novel approach is the creation of lignite price contours on the mine and power plant profit distribution chart. It shows the inherent contradiction between individual and group rationality in bilateral monopoly (BM) and the reduction of incentive to opportunism together with the increase of lignite price. The opportunism due to asymmetry of information and possession of dominant strategy of mine (optimization of ultimate pit) creates a real threat to cooperation between both sides of BM. The full confidence in joint profit maximization and full control of accepted profit sharing without increase of transactional costs is possible only in vertically integrated energy producer offering equal access to information for both sides. As it was shown in [4] such solution does not create any threat for energy market efficiency – on the contrary it can allow on better level of deposit recovery through excavation of the greater ultimate pit. The interesting proposal is the treatment of pit optimization as a real option of mine size change. Presented methods, tools and solutions should help both firms in real negotiation in finding their strategic positions and avoiding potential threats. But eventually from negotiating sides it depends if they will choose the cooperation or competition, rational arguments or rational threats, maximization of joint profits or only their own.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4163.

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Date of creation: 27 Jan 2006
Date of revision: 27 Jan 2006
Publication status: Published in Górnictwo Odkrywkowe (Opencast Mining) No.1-2.XLIX(2007): pp. 81-88
Handle: RePEc:pra:mprapa:4163

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Keywords: bilateral monopoly; lignite price; price negotiation; bargaining; Nash bargaining solution; cooperative game; non-zero sum game; pit optimisation; Lerchs-Grossmann algorithm; vertical integration; Pareto efficiency; opportunism; asymmetry of information; ultimate pit; optimal pit; lignite mining; real option;

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  1. Jurdziak, Leszek, 2006. "Schemat arbitrażowy Nasha, a podział zysków w bilateralnym monopolu kopalni węgla brunatnego i elektrowni. Cześć pierwsza – podstawy teoretyczne
    [Nash bargaining solution and the split of p
    ," MPRA Paper 4142, University Library of Munich, Germany, revised 17 Jan 2006.
  2. Jurdziak, Leszek, 2006. "Negocjacje pomiędzy kopalnią węgla brunatnego a elektrownią jako kooperacyjna, dwuetapowa gra dwuosobowa o sumie niezerowej," MPRA Paper 478, University Library of Munich, Germany, revised 20 Feb 2000.
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