The non-existence of pairwise-proof equilibrium

McAfee, R. Preston; Schwartz, Marius

doi:10.1016/0165-1765(95)00681-5

Cited by 48 publications

(54 citation statements)

References 5 publications

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“…8 For additional information see McAfee and Schwartz (1995). 9 Pairwise proofness is very close in spirit to the passive beliefs assumption used by Hart and Tirole (1990) and McAfee and Schwartz (1994).…”

Section: Downstream Competition and Bargaining Outcomesmentioning

confidence: 84%

“…7 Two additional justifications for why the negotiations with the two downstream firm take place privately/separately and not in the same room are, first, the fact that making one contract contingent on other contracts may be quite complex, and second, that third parties may be unable to observe others' dealings and verify them to court (see McAfee and Schwartz, 1995).…”

Section: Downstream Competition and Bargaining Outcomesmentioning

confidence: 99%

“…1 0 McAfee and Schwartz (1995) have demonstated that such an assumption is necessary for the existence of a pairwise proof equilibrium. It is important to note that we would have obtained the same equilibrium outcomes with passive beliefs under a more strict condition, i.e.…”

Section: Downstream Competition and Bargaining Outcomesmentioning

confidence: 99%

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Upstream horizontal mergers, vertical contracts, and bargaining

Milliou

Petrakis

2007

International Journal of Industrial Organization

118

125

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We study horizontal mergers in the upstream sector of a vertically related industry in which firms bargain over their contract terms. We demonstrate that the contract type is crucial for the merger incentives and the merger effects. When trading takes place through two-part tariff contracts, and not through wholesale price contracts, upstream firms have no incentives to merge. When the contract type is endogenous and the upstream bargaining power is sufficiently low, merger incentives are present and wholesale price contracts are chosen in equilibrium. Finally, upstream horizontal mergers can be procompetitive even in the absence of efficiency gains.

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Section: Downstream Competition and Bargaining Outcomesmentioning

confidence: 84%

Section: Downstream Competition and Bargaining Outcomesmentioning

confidence: 99%

See 1 more Smart Citation

Upstream horizontal mergers, vertical contracts, and bargaining

Milliou

Petrakis

2007

International Journal of Industrial Organization

118

125

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“…We assume that the collusive equilibria are sustained through infinite Nash reversion by the retailers. 18 That is, after all profits have realized at the end of each period, the retailers react to any deviation from the collusive equilibrium strategy by only accepting the non-collusive, Cournot-Nash equilibrium offers from the next period onwards.…”

Section: The Modelmentioning

confidence: 99%

“…Note that the deviation profit in (43) differs from the upstream firm's deviation profit under integrated distribution (18) only in the number of retailers the manufacturer deviates with. The upstream firm has no incentive to deviate individually from perfect collusion if the following incentive constraint holds:…”

Section: Collusive Equilibriamentioning

confidence: 99%

Collusive Effects of a Monopolist's Use of an Intermediary to Deliver to Retailers

Teichmann

Schlippenbach

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in December 2014Abstract A manufacturer contracting secretly with several downstream competitors faces an opportunism problem, preventing it from exerting its market power. In an infinitely repeated game, the opportunism problem can be relaxed. We show that the upstream firm's market power can be restored even further if the upstream firm chooses a mixed distribution system in which it makes use of an intermediary to distribute the good to a subset of the retailers and delivers directly only to the remaining downstream firms.JEL Classification: L12, L14, L42

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Upstream market structure and the timing of technology adoption

Alipranti

Petrakis

2021

Manage Decis Econ

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We study the timing of new cost‐reducing technology adoption in vertically related markets with either upstream monopoly or upstream separate suppliers. We find that technology adoption in the downstream market can take place earlier under upstream monopoly than under upstream separate suppliers. Hence, an upstream monopoly supplier can accelerate the adoption of new technology downstream. We also show that this finding does not depend on the particular features of a vertically related market, such as the contract type through which trading is conducted or the mode of downstream competition.

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The non-existence of pairwise-proof equilibrium

Cited by 48 publications

References 5 publications

Upstream horizontal mergers, vertical contracts, and bargaining

Upstream horizontal mergers, vertical contracts, and bargaining

Collusive Effects of a Monopolist's Use of an Intermediary to Deliver to Retailers

Upstream market structure and the timing of technology adoption

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