IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-22-00666.html
   My bibliography  Save this article

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

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I2-P89.pdf
    Download Restriction: no
    ---><---

    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.
    2. Steve Dowrick, 1986. "von Stackelberg and Cournot Duopoly: Choosing Roles," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 251-260, Summer.
    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. 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.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abhik Roy & Jagmohan Raju, 2011. "The influence of demand factors on dynamic competitive pricing strategy: An empirical study," Marketing Letters, Springer, vol. 22(3), pages 259-281, September.
    2. Grandner, Thomas, 2001. "Unions in oligopolistic, vertically connected industries," European Economic Review, Elsevier, vol. 45(9), pages 1723-1740, October.
    3. Bárcena Ruiz, Juan Carlos & Campo Corredera, María Luz, 2003. "Timing of Wage Setting when Firms Invest in R&D," IKERLANAK 1134-8984, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    4. Chul‐Hi Park & Sang‐Ho Lee, 2023. "Environmental corporate social responsibility under price competition and the second‐mover advantage: An endogenous timing approach," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 817-829, December.
    5. Grandner, Thomas, 2000. "A note on unionized firms' incentive to integrate vertically," Department of Economics Working Paper Series 70, WU Vienna University of Economics and Business.
    6. Ciprian Rusescu & Mihai Daniel Roman, 2020. "Product Differentiation Impact on Games Theory Models," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 500-508, December.
    7. Minas Vlassis & Nick Drydakis, 2012. "Wage discrimination and antidiscrimination policy in unionized industries," Journal of Economics, Springer, vol. 105(1), pages 45-62, January.
    8. Thierry Lafay, 2010. "A linear generalization of Stackelberg’s model," Theory and Decision, Springer, vol. 69(2), pages 317-326, August.
    9. Thomas Grandner, 2000. "A Note on Unionized Firms' Incentive to Integrate Vertically," Department of Economics Working Papers wuwp070, Vienna University of Economics and Business, Department of Economics.
    10. Grandner, Thomas, 1998. "Market shares of price setting firms and trade unions," Department of Economics Working Paper Series 61, WU Vienna University of Economics and Business.
    11. Grandner, Thomas, 2000. "Optimal contracts for vertically connected, unionized duopolies," Department of Economics Working Paper Series 71, WU Vienna University of Economics and Business.
    12. Toshihiro Matsumura & Akira Ogawa, 2017. "Endogenous Timing in Mixed Duopolies With Externality," Australian Economic Papers, Wiley Blackwell, vol. 56(4), pages 304-327, December.
    13. Thomas Grandner, 1998. "Market Shares of Price Setting Firms and Trade Unions," Department of Economics Working Papers wuwp061, Vienna University of Economics and Business, Department of Economics.
    14. Luciano Fanti, 2016. "Endogenous timing under price competition and unions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(4), pages 401-413, December.
    15. DongJoon Lee & Kangsik Choi & Kyuchan Hwang, 2017. "First-Mover and Second-Mover Advantages in a Bilateral Duopoly," Korean Economic Review, Korean Economic Association, vol. 33, pages 35-53.
    16. Luca Lambertini, 2000. "Strategic Delegation and the Shape of Market Competition," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(5), pages 550-570, November.
    17. Barcena-Ruiz, Juan Carlos, 2003. "Politically preferred wage bargaining structures," European Journal of Political Economy, Elsevier, vol. 19(2), pages 341-353, June.
    18. Emmanuel Petrakis & Minas Vlassis, 1999. "The strategic role of minimum sectorial wages in oligopoly: a case for the Spanish labour market," Investigaciones Economicas, Fundación SEPI, vol. 23(3), pages 331-350, September.
    19. Michael Kopel & Clemens Löffler, 2008. "Commitment, first-mover-, and second-mover advantage," Journal of Economics, Springer, vol. 94(2), pages 143-166, July.
    20. Din Hong-Ren & Sun Chia-Hung, 2018. "Endogenous Timing in Vertically-Related Markets," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(2), pages 1-18, July.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-22-00666. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.