Cournot vs. Bertrand under centralised bargaining

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Basak, Debasmita (2017) Cournot vs. Bertrand under centralised bargaining. Economics Letters, 154 . pp. 124-127. ISSN 0165-1765

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Abstract

We revisit the debate on Cournot and Bertrand profit comparison in a vertically related upstream market for inputs. We find that when an input pricing contract is determined through centralised bargaining, the final goods producers earn higher (lower) profit under quantity competition than under price competition if the goods are substitutes (complements). Our results are strikingly different to the ones obtained from a similar comparison in other vertical pricing models.

Item Type: Article
Keywords: Bargaining; Bertrand; Cournot; Centralised bargaining; Vertical pricing; Welfare
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number: https://doi.org/10.1016/j.econlet.2017.02.031
Depositing User: Eprints, Support
Date Deposited: 04 Jul 2017 12:53
Last Modified: 02 Sep 2018 04:30
URI: https://eprints.nottingham.ac.uk/id/eprint/43971

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