Price Discount for the Increased Order as a Cooperative Game in Bilateral Monopoly

Sławomir Kalinowski


The bilateral monopoly is the market structure that joins sole producer of the good and the monopolistic distributor of it. There are two possible solutions to the determination of price and quantity traded between buyer and seller. First, non-cooperative one, is the price leadership of the seller producing the Bowley equilibrium. Second is cooperative solution maximizing joint profits with undetermined price. The price level shares the sum of profits between buyer and seller. The article applies the Nash bargaining solution to determine the agreement point in two stage cooperation. The aim of the study is to investigate, what will be the cooperative solution if the buyer and seller achieve the Bowley equilibrium point first and then negotiate cooperative set of the price discount and the quantity traded growth rate. The outcome of the model is the asymmetric division of the maximized joint profit. Thanks to his price leadership,the share of the seller is significantly higher than for the one stage cooperation.
Author Sławomir Kalinowski (WZ / KM)
Sławomir Kalinowski,,
- Department of Microeconomics
Journal seriesEconomics & Sociology, ISSN 2071-789X, e-ISSN 2306-3459, (B 15 pkt)
Issue year2015
Publication size in sheets0.5
Keywords in Englishbilateral monopoly, Nash bargaining solution, cooperative games, Bowley equilibrium
ASJC Classification2000 General Economics, Econometrics and Finance; 3312 Sociology and Political Science
Languageen angielski
Score (nominal)15
Score sourcejournalList
ScoreMinisterial score = 15.0, 23-12-2019, ArticleFromJournal
Ministerial score (2013-2016) = 15.0, 23-12-2019, ArticleFromJournal
Publication indicators WoS Citations = 1; Scopus SNIP (Source Normalised Impact per Paper): 2015 = 2.089
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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