Industry profits and market size under bilateral oligopoly

TitleIndustry profits and market size under bilateral oligopoly
Publication TypeWorking Paper
Year of Publication2001
AuthorsR. Naylor
Number2001_08
Abstract

We show that, contrary to the key result of the standard Cournot-Nash oligopoly model, industry profits can increase with the number of firms if input prices are not exogenous but are determined by bargaining in bilateral oligopoly. The relationship between industry profits and market size is shown to depend on the relative bargaining power of the upstream and downstream agents.

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