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Bargaining Power of a Coalition in Parallel Bargaining: Advantage of Multiple Cable System Operators

Listed author(s):
  • Suchan Chae
  • Paul Heidhues

The paper shows that integrating two players on the same side of two independent bilateral monopoly markets can increase their bargaining power. A leading example of such a situation is bargaining between cable operators and broadcasters regarding the carriage of broadcasters’ signals on cable systems in two separate markets. From the modeling point of view, one innovation the paper introduces is to generate a coalition’s preferences by aggregating the preferences of its members. ZUSAMMENFASSUNG - (Die Verhandlungsmacht einer Koalition in parallelen Verhandlungen: Die Vorteile aus Unternehmenszusammenschlüssen regionaler Kabelbetreiber in den USA) Ausgehend von zwei unabhängigen bilateralen Monopolen, werden in diesem Beitrag die Auswirkungen von horizontalen Unternehmenszusammenschlüssen auf die Verhandlungsmacht einer Marktseite untersucht. Als Beispiel einer solchen Marktstruktur wird das Verhandlungsproblem zwischen US-amerikanischen Kabelbetreibern und lokalen Fernsehstationen in zwei von einander unabhängigen Märkten betrachtet. Es wird gezeigt, daß sich ein Zusammenschluß auf einer Marktseite lohnen kann, weil sich hierdurch die Verhandlungsmacht der integrierten Unternehmung erhöhen kann. Verhandelt ein horizontal integriertes Unternehmen in mehreren Märkten, so nimmt es in jedem einzelnen Markt die Verhandlungslösung der anderen Märkte als gegeben an. Würde die Verhandlung in einem Markt scheitern, bekäme das integrierte Unternehmen immer noch Zahlungen von den anderen Märkten. Falls dies das Unternehmen glaubwürdig höhere Forderungen stellen läßt, erhöht dies die Verhandlungsmacht des integrierten Unternehmens, was als fall-back position Effekt bezeichnet wird. Des weiteren zeigt der Artikel, daß das Aufteilen des Verhandlungsrisikos auf mehrere Personen deren Verhandlungsmacht erhöhen kann, was als risk-sharing Effekt bezeichnet wird. Aus verhandlungstheoretischer Sicht werden in diesem Artikel erstmalig die Präferenzen einer Koalition durch die Aggregation der Präferenzen ihrer Mitglieder hergeleitet.

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Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 99-01.

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Length: 65 pages
Date of creation: Jan 1999
Handle: RePEc:wzb:wzebiv:fsiv99-01
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  1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
  2. Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-497, June.
  3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
  4. Chae, Suchan, 1993. "The n-person Nash bargaining solution with time preference," Economics Letters, Elsevier, vol. 41(1), pages 21-24.
  5. Segendorff, Bjorn, 1998. "Delegation and Threat in Bargaining," Games and Economic Behavior, Elsevier, vol. 23(2), pages 266-283, May.
  6. Byoung Heon Jun, 1989. "Non-cooperative Bargaining and Union Formation," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 59-76.
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