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Article Dans Une Revue Economics Letters Année : 2020

Auctions vs. negotiations in vertically related markets

Résumé

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 bargaining 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.

Dates et versions

hal-02612764 , version 1 (19-05-2020)

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Emanuele Bacchiega, Olivier Bonroy, Emmanuel Petrakis. Auctions vs. negotiations in vertically related markets. Economics Letters, 2020, 192 (July), ⟨10.1016/j.econlet.2020.109198⟩. ⟨hal-02612764⟩
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