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Mark-Up Pricing and Bilateral Monopoly

Author

Listed:
  • Andreas IRMEN.

Abstract

It is an empirically established fact that managers use cost based percentage margins when they price their goods. As a consequence, percentage mark-ups should be determined as equilibrium choices. This paper incorporates this empirical observation into the analysis of competition among bilateral monopolists.

Suggested Citation

  • Andreas IRMEN., 1996. "Mark-Up Pricing and Bilateral Monopoly," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9622, Université de Lausanne, Faculté des HEC, DEEP.
  • Handle: RePEc:lau:crdeep:9622
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    References listed on IDEAS

    as
    1. Young, Allan Richard, 1991. "Vertical Structure and Nash Equilibrium: A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 39(6), pages 717-722, December.
    2. Grant, Simon & Quiggin, John, 1994. "Nash equilibrium with mark-up-pricing oligopolists," Economics Letters, Elsevier, vol. 45(2), pages 245-251, June.
    3. Hugo Sonnenschein, 1968. "The Dual of Duopoly Is Complementary Monopoly: or, Two of Cournot's Theories Are One," Journal of Political Economy, University of Chicago Press, vol. 76, pages 316-316.
    4. Thomas von Ungern-Sternberg, 1999. "Percentage Retail Mark-Ups," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 135(IV), pages 539-557, December.
    5. Michael Waterson, 1980. "Price-Cost Margins and Successive Market Power," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 135-150.
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    Cited by:

    1. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    2. Wang, Jian-Cai & Lau, Amy Hing-Ling & Lau, Hon-Shiang, 2013. "Dollar vs. percentage markup pricing schemes under a dominant retailer," European Journal of Operational Research, Elsevier, vol. 227(3), pages 471-482.
    3. Wen-Chung Guo & Fu-Chuan Lai & Chorng-Jian Liu & Chao-Cheng Mai, 2012. "Symbiotic Production and Downstream Market Competition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 329-340, September.
    4. Wang, Yao-Yu & Wang, Jian-Cai & Shou, Biying, 2013. "Pricing and effort investment for a newsvendor-type product," European Journal of Operational Research, Elsevier, vol. 229(2), pages 422-432.
    5. Charles J. Corbett & Deming Zhou & Christopher S. Tang, 2004. "Designing Supply Contracts: Contract Type and Information Asymmetry," Management Science, INFORMS, vol. 50(4), pages 550-559, April.

    More about this item

    Keywords

    bilateral monopoly; double marginalization; selling costs; mark-up pricing;

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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