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Mark-up pricing and bilateral monopoly

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  • Irmen, Andreas

Abstract

It is an empirically established fact that managers use cost based percentage margins when they price their goods. As a consequence, percentage mark-ups should be determined as equilibrium choices. This paper incorporates this empirical observation into the analysis of competition among bilateral monopolists.
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Suggested Citation

  • Irmen, Andreas, 1997. "Mark-up pricing and bilateral monopoly," Economics Letters, Elsevier, vol. 54(2), pages 179-184, February.
    • Handle: RePEc:eee:ecolet:v:54:y:1997:i:2:p:179-184
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    References listed on IDEAS

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    1. Young, Allan Richard, 1991. "Vertical Structure and Nash Equilibrium: A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 39(6), pages 717-722, December.
    2. Thomas von Ungern-Sternberg, 1999. "Percentage Retail Mark-Ups," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 135(IV), pages 539-557, December.
    3. Michael Waterson, 1980. "Price-Cost Margins and Successive Market Power," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(1), pages 135-150.
    4. Grant, Simon & Quiggin, John, 1994. "Nash equilibrium with mark-up-pricing oligopolists," Economics Letters, Elsevier, vol. 45(2), pages 245-251, June.
    5. Hugo Sonnenschein, 1968. "The Dual of Duopoly Is Complementary Monopoly: or, Two of Cournot's Theories Are One," Journal of Political Economy, University of Chicago Press, vol. 76(2), pages 316-316.
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    Cited by:

    1. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    2. Niu, Baozhuang & Chen, Lei & Xie, Fengfeng, 2020. "Production outsourcing for limited-edition luxury goods with consideration of consumers’ origin preferences," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    3. Wen-Chung Guo & Fu-Chuan Lai & Chorng-Jian Liu & Chao-Cheng Mai, 2012. "Symbiotic Production and Downstream Market Competition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 329-340, September.
    4. Lee, Eunji & Minner, Stefan, 2024. "How power structure and markup schemes impact supply chain channel efficiency under price-dependent stochastic demand," European Journal of Operational Research, Elsevier, vol. 318(1), pages 297-309.
    5. Wang, Jian-Cai & Lau, Amy Hing-Ling & Lau, Hon-Shiang, 2013. "Dollar vs. percentage markup pricing schemes under a dominant retailer," European Journal of Operational Research, Elsevier, vol. 227(3), pages 471-482.
    6. Senbiao Li & Shuxiao Sun, 2024. "Optimal Markup Pricing Strategies in a Green Supply Chain under Different Power Structures," Mathematics, MDPI, vol. 12(13), pages 1-29, June.
    7. Yao-Yu Wang & Jiasen Sun & Jian-Cai Wang, 2016. "Equilibrium markup pricing strategies for the dominant retailers under supply chain to chain competition," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2075-2092, April.
    8. Wang, Yao-Yu & Wang, Jian-Cai & Shou, Biying, 2013. "Pricing and effort investment for a newsvendor-type product," European Journal of Operational Research, Elsevier, vol. 229(2), pages 422-432.
    9. Charles J. Corbett & Deming Zhou & Christopher S. Tang, 2004. "Designing Supply Contracts: Contract Type and Information Asymmetry," Management Science, INFORMS, vol. 50(4), pages 550-559, April.

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    More about this item

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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