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

Collard-Wexler, Allan; Gowrisankaran, Gautam; Lee, Robin

doi:10.3386/w20641

Cited by 18 publications

(3 citation statements)

References 42 publications

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“…This is not the case in many strategy contexts (de Fontenay and Gans, , ). Also, some recent industrial organization papers doing structural estimation of vertical relations use the Nash bargaining solution for the CGT stage (Collard‐Wexler, Gowrisankaran, and Lee, ). This also poses difficulties for dealing with competitive externalities (that arise when competing firms are prevented, say by antitrust laws, from negotiating directly with one another), but it has proven to be tractable for the study of vertical relations when downstream firms operate in distinct markets.…”

Section: Comparison To Other Modeling Approachesmentioning

confidence: 99%

Value capture theory: A strategic management review

Gans

Ryall

2016

Strategic Management Journal

131

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Research summary:This article provides the first review of a growing line of scholarly work in strategy that we refer to as "value capture theory." The common thread in this work is its use of cooperative game theory as a general, mathematical foundation upon which to build a deep understanding of firm performance in market settings. Our review: (1) describes the primary elements of the theory; (2) highlights important blindspots that it resolves with respect to existing theoretical approaches; (3) calls attention to several of its novel insights; and (4) summarizes a myriad of applications and empirical studies that have appeared in recent years using value capture theory.Managerial summary: Traditionally, theoretical claims in strategic management have been supported by informal, qualitative reasoning. Recently, however, a new line of theoretical work based upon mathematical methods, known as "value capture theory," has been gaining in popularity. This article reviews the recent advances in this line with a particular emphasis upon a number of its important insights, several of which challenge longstanding propositions from the traditional line. For managers, the formal nature of value capture theory is well-aligned with data-driven analyses of strategic situations.

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Section: Comparison To Other Modeling Approachesmentioning

confidence: 99%

Value capture theory: A strategic management review

Gans

Ryall

2016

Strategic Management Journal

131

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“…This setup matches the structure studied by Collard-Wexler, Gowrisankaran, and Lee (2018), with the exception that we assume firms bargain over linear fees as opposed to lump-sum transfers.…”

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confidence: 99%

The Welfare Effects of Vertical Integration in Multichannel Television Markets

Crawford¹,

Lee²,

Whinston³

et al. 2018

Econometrica

161

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We would like to thank the editor, five anonymous referees, and numerous individuals and seminar participants for helpful comments; and ESRC Grant RES-062-23-2586 (Crawford), the NYU Stern Center for Global Economy and Business (Lee), and the Toulouse Network for Information Technology and the NSF (Whinston) for support. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w21832.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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“…To focus on vertical agreements, we rule out any kind of "horizontal" mechanisms such as, e.g., loyalty rebates or Most Favored Nation provisions, 10 and consider instead contracts purely based on the quantity traded: Formally, a contract between M i and R h is a tari¤ ih : < + ! <, where ih (q) is the payment from R h to M i in return for a quantity q of good i.…”

Section: The Frameworkmentioning

confidence: 99%

Exclusive dealing and vertical integration in interlocking relationships

Nocke

Rey

2018

Journal of Economic Theory

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We develop a model of interlocking bilateral relationships between upstream …rms (manufacturers) that produce di¤erentiated goods and downstream …rms (retailers) that compete imperfectly for consumers. Contract o¤ers and acceptance decisions are private information to the contracting parties. We show that both exclusive dealing and vertical integration between a manufacturer and a retailer lead to vertical foreclosure, to the detriment of consumers and society. Finally, we show that …rms have indeed an incentive to sign such contracts or to integrate vertically.JEL Classi…cation: L13, L42, D43.

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

Cited by 18 publications

References 42 publications

Value capture theory: A strategic management review

Value capture theory: A strategic management review

The Welfare Effects of Vertical Integration in Multichannel Television Markets

Exclusive dealing and vertical integration in interlocking relationships

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