A Simulation Model of the Price Bargaining Rules in Vertical Relationships
This paper analyzes the dynamics of the price and quantity bargaining between four agents, in a current industrial structure, with a special attention to the price bargaining. The structure combines a bilateral monopoly in a market for inputs, and a duopoly in a final market. After a simplified presentation of a model which proposes equilibrium solutions to the bargaining, we present the protocol and the results of an experiment whose objective is twofold. The first one is to test the assumptions of the model. The second one is to identify behavioral models and bargaining rules for a work of simulation. The experimental results do not confirm the solutions of the theoretical model, which predicted a Nash solution for the price bargaining, and used the cournot conjecture in the quantity bargaining. A detailed analysis of the results leads to some observations useful to parameterize a simulation model. The simulation runs a systematic analysis of the dynamics of the bargaining rules in this structure.
Volume (Year): 23 (2004)
Issue (Month): 2 (03)
|Contact details of provider:|| Web page: http://www.springerlink.com/link.asp?id=100248|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:kap:compec:v:23:y:2004:i:2:p:121-145. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.