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Autoren: 
Aghadadashli, Hamid
Dertwinkel-Kalt, Markus
Wey, Christian
Datum: 
2016
Schriftenreihe/Nr.: 
DICE Discussion Paper No. 224
Zusammenfassung: 
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.
Schlagwörter: 
Nash Bargaining
Demand Elasticity
JEL: 
L13
ISBN: 
978-3-86304-223-3
Dokumentart: 
Working Paper

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