@techreport{Aghadadashli2016Nash,
abstract = {We re-examine the Nash bargaining solution when an upstream and a downstream firm bargain over a linear input price. We show that the profit sharing rule is given by a simple and instructive formula which depends on the parties' disagreement payoffs, the profit weights in the Nash-product and the elasticity of derived demand. A downstream firm's profit share increases in the equilibrium derived demand elasticity which in turn depends on the final goods' demand elasticity. Our simple formula generalizes to bargaining with N downstream firms when bilateral contracts are unobservable.},
address = {D\"{u}sseldorf},
author = {Hamid Aghadadashli and Markus Dertwinkel-Kalt and Christian Wey},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {978-3-86304-223-3},
keywords = {L13; 330; Nash Bargaining; Demand Elasticity},
language = {eng},
number = {224},
publisher = {D\"{u}sseldorf Institute for Competition Economics (DICE)},
title = {The Nash bargaining solution in vertical relations with linear input prices},
type = {DICE Discussion Paper},
url = {http://hdl.handle.net/10419/142251},
year = {2016}
}