We propose a simple bargaining procedure, the equilibrium of which converges to the Walrasian allocation as the agents become increasingly patient. We thus establish that the competitive outcome obtains even if agents have market power and are not price-takers. Moreover, where in other bargaining protocols the final outcome depends on bargaining power or relative impatience, the outcome here is...

The aim of this paper is to determine how the place of a player in a network of communications ̊ affects her bargaining power with respect to the others. We adapt the Rubinstein-Stahl two-player noncooperative bargaining game of alternating offers to the case of n players connected through a graph. We show that this game has a unique stationary subgame perfect equilibrium outcome from which we d...

I use the health care industry as a novel laboratory in which to study a firm’s strategic use of debt to enhance their bargaining power during negotiations with non-financial stakeholders. I show that reimbursement rates negotiated between a hospital and insurers for a specific procedure are higher when the hospital has more debt. I also show that this effect is stronger when hospitals have les...

Experiments with the ultimatum game—where one party can make a take-it-or-leave-it offer to a second party on how to split a pie—illustrate that conventional game theory has been wrong in its predictions regarding the simplest of bargaining settings: Even when one party has enormous bargaining power, she may be able to extract all the surplus from trade, because the second party will reject gro...

BACKGROUND Many of public hospitals in Japan have had a deficit for a long time. Japanese local governments have been encouraging public hospitals to use group purchasing of drugs to benefit from the economies of scale, and increase their bargaining power for obtaining discounts in drug purchasing, thus improving their financial situation. In this study, we empirically investigate whether or no...

Does International Outsourcing Really Lower Workers’ Income? We analyze the impact of international outsourcing on income, if the domestic labor market is imperfect. We distinguish in our analysis between the case where the parties negotiate over the wage only and where they negotiate over both wage and profit share. We find that in the first case outsourcing will reduce (increase) workers’ inc...

Our main objective is to investigate the influence of the bargaining power within a chain on its industry. As a building block, we first discuss the implications of bargaining within a single chain by considering an asymmetric Nash bargaining on the wholesale price (BW). We show that both Manufacturer Stackelberg (MS) and VI strategies are special cases of the BW contract. We then develop the N...

Like any new product, private label entry increases competition within a category leading to downward pressure on both wholesale and retail prices. But, given the higher margins for private labels and potential bargaining benefits for retailers, they have incentives to help private labels gain market share. The paper addresses two questions: First, do private labels enhance a retailer's bargain...