Bilateral oligopoly

Arbeitspapier

In many intermediate goods markets buyers and sellers both have market power. Contracts are usually long-term and negotiated bilaterally, codifying many elements in addition to price. We model such bilateral oligopolies as a set of simultaneous Rubinstein-Ståhl bargainings over contracts specifying price and quantity, between pairs of buyers and sellers. Equilibrium quantities are efficient regardless of concentration. The law of one price does not hold. Prices depend on concentration of capital and concentration of sales. If the quantity sold represents a small share of both the firms’ sales and purchases, the price is close to the Walrasian price.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. FS IV 01-08

Classification and Topics

• Classification: Wirtschaft
• Subject: Bilateral oligopoly ; bargaining ; intermediate goods ; decentralized trade ; Walrasian outcome

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Björnerstedt, Jonas ; Stennek, Johan
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/51040