Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82779
Authors: 
Björnerstedt, Jonas
Westermark, Andreas
Year of Publication: 
2006
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2006:6
Abstract: 
In bargaining between two sellers and one buyer on prices and quantities, strategic inefficiencies arise. By reallocating between the last agreement and the first, the buyer can increase it's share of the surplus. With symmetric sellers producing substitutes, the quantities in the first agreement will be higher than the efficient, and lower than the efficient in the last, implying that sellers are strategically discriminated. In equilibrium when the sellers produce substitutes, the buyer agrees first with the seller with lowest marginal cost. Efficiency is decreasing in the symmetry of the sellers and in the relative bargaining power of the sellers.
Subjects: 
Bargaining
discrimination
intermediate goods
labor demand
JEL: 
C78
J22
J71
L10
Document Type: 
Working Paper

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