Endogenous price leadership with an essential input

• 成果类型: Article
• 署名作者: Madden, Paul; Pezzino, Mario
• 署名单位: University of Manchester
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2019.08.002
• 发表日期: 2019
• 页码: 47-59
• 关键词: Timing game; Price competition; differentiated products; Wholesaling essential input

摘要

The Hamilton-Slutsky endogenous timing methodology is applied to differentiated duopolies where, motivated by access pricing literature, one firm owns an essential input, sold wholesale to the rival. Both firms then set retail prices for their differentiated goods. The scenario and results are different from standard endogenous timing duopolies, encompassing three prices (one wholesale, two retail) rather than two, with unique timing game equilibrium which always entails retail price leadership by the input owner, thus providing a new and powerful rationalisation for Stackelberg. The results call into question the generic access pricing assumption that simultaneous moves determine retail (downstream) prices. (C) 2019 Elsevier Inc. All rights reserved.