IDEAS home Printed from https://ideas.repec.org/p/bar/bedcje/2012283.html
   My bibliography  Save this paper

Vertical Syndication-Proof Competitive Prices in Multilateral Markets

Author

Listed:
  • O. Tejada and M. Alvarez-Mozos

    (Universitat de Barcelona)

Abstract

A multi-sided Bohm-Bawerk assignment game (Tejada, to appear) is a model for a multilateral market with a finite number of perfectly complementary indivisible com- modities owned by different sellers, and inflexible demand and support functions. We show that for each such market game there is a unique vector of competitive prices for the commodities that is vertical syndication-proof, in the sense that, at those prices, syndication of sellers each owning a different commodity is neither beneficial nor detri- mental for the buyers. Since, moreover, the benefits obtained by the agents at those prices correspond to the nucleolus of the market game, we provide a syndication-based foundation for the nucleolus as an appropriate solution concept for market games. For different solution concepts a syndicate can be disadvantageous and there is no escape to Aummans paradox (Aumann, 1973). We further show that vertical syndication- proofness and horizontal syndication-proofness in which sellers of the same commod- ity collude are incompatible requirements under some mild assumptions. Our results build on a self-interesting link between multi-sided Bohm-Bawerk as- signment games and bankruptcy games (ONeill, 1982). We identify a particular subset of Bohm-Bawerk assignment games and we show that it is isomorphic to the whole class of bankruptcy games. This isomorphism enables us to show the uniqueness of the vec- tor of vertical syndication-proof prices for the whole class of Bohm-Bawerk assignment market using well-known results of bankruptcy problems.

Suggested Citation

  • O. Tejada and M. Alvarez-Mozos, 2012. "Vertical Syndication-Proof Competitive Prices in Multilateral Markets," Working Papers in Economics 283, Universitat de Barcelona. Espai de Recerca en Economia.
  • Handle: RePEc:bar:bedcje:2012283
    as

    Download full text from publisher

    File URL: http://www.ere.ub.es/dtreball/E12283.rdf/at_download/file
    Download Restriction: no

    References listed on IDEAS

    as
    1. Gardner, Roy, 1977. "Shapley value and disadvantageous monopolies," Journal of Economic Theory, Elsevier, vol. 16(2), pages 513-517, December.
    2. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
    3. Oriol Tejada, 2010. "A note on competitive prices in multilateral assignment markets," Economics Bulletin, AccessEcon, vol. 30(1), pages 658-662.
    4. Legros, Patrick, 1987. "Disadvantageous syndicates and stable cartels: The case of the nucleolus," Journal of Economic Theory, Elsevier, vol. 42(1), pages 30-49, June.
    5. Quint, Thomas, 1991. "The core of an m-sided assignment game," Games and Economic Behavior, Elsevier, vol. 3(4), pages 487-503, November.
    6. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    7. Andrew Postlewaite, 1974. "Disadvantageous Syndicates in Exchange Economies," Discussion Papers 105, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
    9. Guesnerie, Roger, 1977. "Monopoly, syndicate, and shapley value: About some conjectures," Journal of Economic Theory, Elsevier, vol. 15(2), pages 235-251, August.
    10. Postlewaite, Andrew & Rosenthal, Robert W., 1974. "Disadvantageous syndicates," Journal of Economic Theory, Elsevier, vol. 9(3), pages 324-326, November.
    11. Shapley, Lloyd S. & Shubik, Martin, 1969. "On market games," Journal of Economic Theory, Elsevier, vol. 1(1), pages 9-25, June.
    12. Okuno, Masahiro & Postlewaite, Andrew & Roberts, John, 1980. "Oligopoly and Competition in Large Markets," American Economic Review, American Economic Association, vol. 70(1), pages 22-31, March.
    13. Aumann, Robert J., 1973. "Disadvantageous monopolies," Journal of Economic Theory, Elsevier, vol. 6(1), pages 1-11, February.
    14. Oriol Tejada & Carles Rafels, 2010. "Symmetrically multilateral-bargained allocations in multi-sided assignment markets," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 249-258, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tejada, O. & Borm, P. & Lohmann, E., 2014. "A unifying model for matrix-based pairing situations," Mathematical Social Sciences, Elsevier, vol. 72(C), pages 55-61.
    2. Tejada, J. & Borm, P.E.M. & Lohmann, E.R.M.A., 2013. "A Unifying Model for Matching Situations," Discussion Paper 2013-069, Tilburg University, Center for Economic Research.

    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bar:bedcje:2012283. 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: (Espai de Recerca en Economia). General contact details of provider: http://edirc.repec.org/data/feubaes.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.