Equilibrium contracts in a bilateral monopoly with unequal bargaining powers: equilibrium contracts in a bilateral monopoly

Siddhartha Dasgupta, Stephen Devadoss

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Real-world bilateral monopolies often indicate that one party exercises slightly Superior bargaining power than the other party. We analyze long-term, cooperative Contracts in bilateral monopolies with unequal bargaining powers. We assume that the Two parties bargain for a determinate price and quantity of the intermediate product by Optimizing a joint objective which takes into account the profits and bargaining power of Each party. We use a Bowley price leadership model to develop the multi-period Contracts and derive conditions that induce a Nash equilibrium at the jointly determined Points of operation. [C71, C78].

Original languageEnglish
Pages (from-to)43-71
Number of pages29
JournalInternational Economic Journal
Volume16
Issue number1
DOIs
StatePublished - Mar 2002

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