Industry profits and market size under bilateral oligopoly
|Title||Industry profits and market size under bilateral oligopoly|
|Publication Type||Working Paper|
|Year of Publication||2001|
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.