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Downstream competition, bargaining, and welfare

Symeonidis, G (2008) 'Downstream competition, bargaining, and welfare.' Journal of Economics and Management Strategy, 17 (1). 247 - 270. ISSN 1058-6407

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Abstract

I analyze the effects of downstream competition when there is bargaining between downstream firms and upstream agents (firms or unions). When bargaining is over a uniform input price, a decrease in the intensity of competition (or a merger) between downstream firms may raise consumer surplus and overall welfare. When bargaining is over a two-part tariff, a decrease in the intensity of competition reduces downstream profits and upstream utility and raises consumer surplus and overall welfare. Standard welfare results of oligopoly theory can be reversed: less competition can be unprofitable for firms and/or beneficial for consumers and society as a whole. © 2008 Blackwell Publishing.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 16 Aug 2012 10:27
Last Modified: 30 Jan 2019 16:16
URI: http://repository.essex.ac.uk/id/eprint/3683

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