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https://hdl.handle.net/20.500.11851/10340
Title: | Centralized Bargaining With Pre-Donation in a Vertically Related Industry | Authors: | Sağlam, İsmail | Keywords: | nash bargaining pre-donation vertically related industry Vs. Quantity Competition Price Market |
Publisher: | Wiley | Abstract: | This paper studies the incentives for, and the welfare effects of, pre-donation in a vertically related industry where two downstream firms that produce a homogenous good jointly bargain, using the generalized Nash rule, with an upstream firm over a linear input price before they engage in Cournot competition. We theoretically show that the downstream industry has no incentive to make any pre-donation and this is irrespective of its bargaining power and also irrespective of whether it is a monopoly or a symmetric or asymmetric duopoly. Also, irrespective of the said structures of the downstream industry, we show computationally that (i) the upstream firm finds to make unilateral pre-donation optimal if and only if its bargaining power is sufficiently small and (ii) its optimal pre-donation (whenever positive) always yields Pareto welfare gains. | URI: | https://doi.org/10.1111/manc.12430 https://hdl.handle.net/20.500.11851/10340 |
ISSN: | 1463-6786 1467-9957 |
Appears in Collections: | Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection |
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