Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330046 
Year of Publication: 
2023
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 14 [Issue:] 4 [Article No.:] 53 [Year:] 2023 [Pages:] 1-8
Publisher: 
MDPI, Basel
Abstract: 
We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output and earns a higher profit than the quantity-setting firm when bargaining is decentralised. Additionally, both firms produce the same output, whereas the profit is higher under the price-setting firm than the quantity-setting firm when bargaining is centralised.
Subjects: 
bargaining
Bertrand
Cournot
two-part tariffs
vertical pricing
JEL: 
D43
L13
L14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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