Auctions vs. negotiations in vertically related markets

Bacchiega, Emanuele and Bonroy, Olivier and Petrakis, Emmanuel (2020) Auctions vs. negotiations in vertically related markets. Bologna: Dipartimento di Scienze economiche, p. 11. DOI 10.6092/unibo/amsacta/6355. In: Quaderni - Working Paper DSE (1145). ISSN 2282-6483.
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Abstract

In a two-tier industry with bottleneck upstream and two downstream firms producing vertically differentiated goods, we identify conditions under which the upstream supplier chooses exclusive or non-exclusive negotiations, or an English auction to sell its essential input. Auctioning off a two-part tariff contract is optimal for the supplier when its bar- gaining power is low and the final goods are not too differentiated. Otherwise, the supplier enters into exclusive or non-exclusive negotiations with the downstream firm(s). Finally, in contrast to previous findings, an auction is never welfare superior to negotiations.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bacchiega, EmanueleUniversità di Bologna0000-0002-7822-6486
Bonroy, OlivierUniversité Grenoble Alpes0000-0002-3589-1961
Petrakis, EmmanuelUniversity of Crete0000-0003-1273-8099
Keywords
Vertical relationships, exclusive vs. non-exclusive relationships, auctions
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Apr 2020 09:46
Last modified
15 Apr 2020 09:46
URI

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