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“Nash-in-Nash” Bargaining: A Microfoundation for Applied Work

Publication ,  Scholarly Edition
Collard-Wexler, A; Gowrisankaran, G; Lee, RS
February 1, 2019

A “Nash equilibrium in Nash bargains” has become a workhorse bargaining model in applied analyses of bilateral oligopoly. This paper proposes a noncooperative foundation for “Nash-in-Nash” bargaining that extends Rubinstein’s alternating offers model to multiple upstream and downstream firms. We provide conditions on firms’ marginal contributions under which there exists, for sufficiently short time between offers, an equilibrium with agreement among all firms at prices arbitrarily close to Nash-in-Nash prices, that is, each pair’s Nash bargaining solution given agreement by all other pairs. Conditioning on equilibria without delayed agreement, limiting prices are unique. Unconditionally, they are unique under stronger assumptions.

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Publication Date

February 1, 2019

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163 / 195

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics
 

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Collard-Wexler, A., Gowrisankaran, G., & Lee, R. S. (2019). “Nash-in-Nash” Bargaining: A Microfoundation for Applied Work. https://doi.org/10.1086/700729
Collard-Wexler, A., G. Gowrisankaran, and R. S. Lee. ““Nash-in-Nash” Bargaining: A Microfoundation for Applied Work,” February 1, 2019. https://doi.org/10.1086/700729.
Collard-Wexler A, Gowrisankaran G, Lee RS. “Nash-in-Nash” Bargaining: A Microfoundation for Applied Work. 2019. p. 163–95.
Collard-Wexler, A., et al. “Nash-in-Nash” Bargaining: A Microfoundation for Applied Work. 1 Feb. 2019, pp. 163–95. Scopus, doi:10.1086/700729.
Collard-Wexler A, Gowrisankaran G, Lee RS. “Nash-in-Nash” Bargaining: A Microfoundation for Applied Work. 2019. p. 163–195.

DOI

Publication Date

February 1, 2019

Start / End Page

163 / 195

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics