Disclosure regime of contract terms and bargaining in vertical markets

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dc.contributor.author Petrakis, Emmanuel
dc.contributor.author Skartados, Panagiotis
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2022-02-16T13:47:42Z
dc.date.available 2022-02-16T13:47:42Z
dc.date.issued 2022-02-16
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/34144
dc.description.abstract We consider a vertically related market where an upstream monopolist supplies two downstream Cournot competitors. We allow the vertical contract terms to be either interim observable or secret. We address a dichotomy in the literature by endogenizing the disclosure regime of contract terms. The latter could be set via a Non-Disclosure Agreement. Firms bargain over both the disclosure regime and the contract terms. Our results indicate that when firms trade over two-part tariffs, universal interim observability is the unique equilibrium no matter the bargaining power distribution or the product differentiation. Yet, when firms trade over linear tariffs there may be a multiplicity of equilibria. We also show that under competing vertical chains we get universal interim observability as a unique equilibrium no matter the upstream structure. Our results qualitatively hold under Bertrand competition too. Our welfare analysis indicates that universal interim observability and two-part tariffs yield the highest consumer surplus and total welfare.
dc.description.sponsorship Petrakis acknowledges financial support from “UC3M-Santander Chairs of Excellence.”
dc.language.iso eng
dc.relation.ispartofseries Working paper. Economics
dc.relation.ispartofseries 22-01
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Bilateral Contracting
dc.subject.other Vertical Relations
dc.subject.other Two-Part Tariffs
dc.subject.other Bargaining
dc.subject.other Nondisclosure Agreements
dc.subject.other Secret Contracts
dc.title Disclosure regime of contract terms and bargaining in vertical markets
dc.type workingPaper
dc.subject.jel D43
dc.subject.jel L13
dc.subject.jel L14
dc.subject.eciencia Economía
dc.identifier.uxxi DT/0000001982
dc.affiliation.dpto UC3M. Departamento de Economía
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