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Sequential coordination and input price leadership in bilateral oligopoly

Author

Listed:
  • Robin Naylor

    (University of Warwick)

  • Christian Soegaard

    (University of Warwick)

Abstract

We analyse the leader/follower incentives of upstream suppliers in a bilateral duopoly setting with decentralised bargaining over input prices, showing that upstream suppliers prefer to set prices sequentially rather than simultaneously. We characterise equilibria involving sequential coordination demonstrating that there is a first mover advantage to the upstream supplier with relatively little bargaining power over input price and a second mover advantage to the supplier with relatively greater bargaining power.

Suggested Citation

  • Robin Naylor & Christian Soegaard, 2023. "Sequential coordination and input price leadership in bilateral oligopoly," Economics Bulletin, AccessEcon, vol. 43(2), pages 1081-1087.
    • Handle: RePEc:ebl:ecbull:eb-22-00666
    as

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    References listed on IDEAS

    as
    1. Avinash Dixit, 1979. "A Model of Duopoly Suggesting a Theory of Entry Barriers," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 20-32, Spring.
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    3. Albaek, Svend, 1990. "Stackelberg Leadership as a Natural Solution under Cost Uncertainty," Journal of Industrial Economics, Wiley Blackwell, vol. 38(3), pages 335-347, March.
    4. Dobson, Paul W., 1994. "Multifirm unions and the incentive to adopt pattern bargaining in oligopoly," European Economic Review, Elsevier, vol. 38(1), pages 87-100, January.
    5. Corneo, Giacomo, 1995. "National wage bargaining in an internationally integrated product market," European Journal of Political Economy, Elsevier, vol. 11(3), pages 503-520, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sequential coordination; bilateral oligopoly; bargaining; first and second mover advantages.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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