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Robin Naylor and Christian Soegaard
''Sequential coordination and input price leadership in bilateral oligopoly''
( 2023, Vol. 43 No.2 )
We analyse the leader/follower incentives of upstream suppliers in a bilateral duopoly setting with decentralised bargaining over input prices, showing that upstream suppliers prefer to set prices sequentially rather than simultaneously. We characterise equilibria involving sequential coordination demonstrating that there is a first mover advantage to the upstream supplier with relatively little bargaining power over input price and a second mover advantage to the supplier with relatively greater bargaining power.
Keywords: Sequential coordination, bilateral oligopoly, bargaining, first and second mover advantages.
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
L2 - Firm Objectives, Organization, and Behavior: General
Manuscript Received : Sep 11 2022 Manuscript Accepted : Jun 30 2023

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