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. Under more restrictive conditions, we extend the analysis and show that consumer and social welfare under bundling or a la carte depends on both bargaining power and advertising rates. Our results imply a monopolist does not necessarily increase deadweight loss, and under certain circumstances a monopolist’s bargaining outcomes yield higher social welfare. KEYWORDS: bundling, a la carte, division of surplus, Nash bargaining, regulation, advertising ∗We thank the editor and three referees for their many useful suggestions. We are grateful to David Sappington and

typically do not have incentives to invest efficiently when they cannot contract prior to their decisions. When they bargain over the surplus generated by their investments, they will usually not obtain the full fruits of the investment. Intuitively, this hold-up problem should be ameliorated if, in the bargaining stage, each agent has alternatives to the partner he is bargaining with. We characterize the matching and division of surplus in finite economies for any initial investment decisions. We provide conditions on those decisions that guarantee that each agent will

first part, Robert A. Ritz addresses social welfare analysis in oligopoly markets focusing on the most recent developments and demonstrating usefulness of the rate of cost pass-trough (proxying the division of surplus between producers and consumers in equilibrium) and analyzing welfare losses due to cost asymmetries between firms and excessive entry of new firms. The second part of the handbook is on dynamic games in IO. First, Klaus Ritzinberger deals with games in extensive forms discussing three alternative definitions of game trees (event, graph and sequence

division of surplus between the parties in the corporate context. The liability rule approach will give an advantage to the majority, whereas the property rule approach gives the minority greater negotiation power.24 A liability rule is not predicated on negotiations and thus gives the majority the upper hand. Suppose that a group of voting shareholders has an asset that it values at $100 and the majority group is interested in purchasing the asset, since it values the asset at $200. In a regime built on the fairness test, the majority can force the transaction upon the

parties cannot commit not to renegotiate their contract and implies that variables related to the division of surplus may affect the rent extracted from club B when the player is transferred. More specifically, we show that, under no commitment, it is no longer the case that the value of the player for club A and the distribution of B’s valuations of the player are sufficient statistics for the total financial outlay incurred by club B when hiring the player. In particular, the compensation that the player must pay A to unilaterally break the relationship—known as the

is very simple and highly stylized. In what follows, we will briefly discuss some possible extensions and caveats. For example, it is conceivable that some politicians are stubborn in the sense that they can credibly commit not to accept demands for relatively high transfers. This could be modelled by assuming that some politicians incur a psycholog- ical cost if they accept a division of surplus that gives one member state a su ciently large payo relative to their own. Such politicians - let us call them ‘obstinate’ - may refuse to accept an ultimatum even if that

overall consumer expenditure remains constant. Result 3: Higher retailer bargaining strength The issue of downstream bargaining strength has long been of concern to agricultural producers. Here I consider what happens if the retailer has disproportionate bargaining strength in the division of surplus from a marketing arrangement. In particular, suppose the producer share of surplus ( β ) falls, all else the same. The transfer price (w) falls, as the derivative of w with respect to β is positive (equation 23). Retail price (p) does not change because it is

% of the top leadership positions (Kolb, Williams, & Frohlinger, 2004). Organizational Culture and Climate In many cases, males are still thought of as the most competent and suitable candidate for employment. Wage setting and supervisory practices “determine the division of surplus between workers and management and control the work process and workers” (Acker, 2006, p. 451). In addition, Acker (1990) noted that supervisors tend to interact with their employees in ways that are gendered in nature. These interactions often “re-create gender inequalities and are

difference – in terms of the final division of surplus – who is the proposer (or initial proposer in the alternating treatments) is intriguing. It suggests that, if enough periods of bargaining are allowed, who plays the role of the proposer does not matter much. 6 Concluding comments Multilateral bargaining problems are particularly complex. This paper attempts to examine bargaining behavior in multilateral bargaining experiments with alternating offers and incomplete information modeled after a land-assembly-type bargaining game. We find that actual bargaining outcomes

paragraphs the economic aspects of the legal prohibition to discriminate will be assessed, first for revenue- based statistical discrimination and then for cost-based statistical discrimina- tion. Where sellers use gender or race to obtain higher prices from groups they be- lieve have a higher willingness to pay although these groups could be served at low costs,34 the legal prohibition to discriminate requires an equal distribu- tion of prices in an effort to achieve an equal division of surplus by race or sex. However, costs need to be incurred to gather data to identify