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NASH BARGAINING AND CO‐OPERATIVES
Author(s) -
OCZKOWSKI EDWARD
Publication year - 2006
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.2006.00279.x
Subject(s) - bargaining problem , economics , comparative statics , microeconomics , profit (economics) , price setting
This paper develops the generalised Nash bargaining solution for a bargaining co‐operative selling its output to a single buyer. Three assumptions for co‐operative members’ behaviour are examined: profit maximisation, co‐operative surplus maximisation and maximising members’ price. Solutions are compared and comparative statics presented for these alternative assumptions and the bargaining over price and quantity transacted. The most striking feature of the results is that pursuing the objective of maximising members’ price does not necessarily lead to the highest members’ price