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

摘要: A \Nash equilibrium in Nash bargains" has become the workhorse bargaining model applied analyses of bilateral oligopoly. This paper proposes a non-cooperative foundation for \Nash-in-Nash" that extends Rubinstein (1982) to multiple upstream and downstream rms. Assuming there exists gains from trade each rm pair, we prove an with immediate agreement negotiated prices correspond if only marginal contribution set agreements is weakly greater than sum agreements’ contributions. We provide stronger conditions under which are unique.