In a two-tier industry with bottleneck upstream and two downstream firms producing vertically differentiated goods, we identify conditions under which the upstream supplier chooses exclusive or non-exclusive negotiations, or an English auction to sell its essential input. Auctioning off a two-part tariff contract is optimal for the supplier when its bargaining power is low and the final goods are not too differentiated. Otherwise, the supplier enters into exclusive or non-exclusive negotiations with the downstream firm(s). Finally, in contrast to previous findings, an auction is never welfare superior to negotiations
Bacchiega, E., Bonroy, O., Petrakis, E. (2020). Auctions vs. negotiations in vertically related markets. ECONOMICS LETTERS, 192, 1-4 [10.1016/j.econlet.2020.109198].
Auctions vs. negotiations in vertically related markets
Bacchiega, Emanuele;
2020
Abstract
In a two-tier industry with bottleneck upstream and two downstream firms producing vertically differentiated goods, we identify conditions under which the upstream supplier chooses exclusive or non-exclusive negotiations, or an English auction to sell its essential input. Auctioning off a two-part tariff contract is optimal for the supplier when its bargaining power is low and the final goods are not too differentiated. Otherwise, the supplier enters into exclusive or non-exclusive negotiations with the downstream firm(s). Finally, in contrast to previous findings, an auction is never welfare superior to negotiationsFile | Dimensione | Formato | |
---|---|---|---|
Supplementary Data 761959.pdf
accesso aperto
Tipo:
File Supplementare
Licenza:
Licenza per Accesso Aperto. Altra tipologia di licenza compatibile con Open Access
Dimensione
523.24 kB
Formato
Adobe PDF
|
523.24 kB | Adobe PDF | Visualizza/Apri |
post print 761959.pdf
Open Access dal 09/05/2022
Tipo:
Postprint
Licenza:
Licenza per Accesso Aperto. Creative Commons Attribuzione - Non commerciale - Non opere derivate (CCBYNCND)
Dimensione
473.12 kB
Formato
Adobe PDF
|
473.12 kB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.