bilateral oligopoly

bilateral oligopoly

a market situation with a significant degree of seller concentration (like OLIGOPOLY) and a significant degree of buyer concentration (like OLIGOPSONY). See COUNTERVAILING POWER.
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The primary reason to have an MFN is that it helps to enforce the bilateral oligopoly. Oligopolies often dissipate because one or another member cheats the cartel and sells at a lower price, but the MFN prevents that from happening.
We experimentally investigate behavior in a bilateral oligopoly using a supply function equilibria model discussed by Klemperer and Meyer (1989), Hendricks and McAfee (2010), and Malueg and Yates (2009).
This market structure is called a bilateral oligopoly. In general, the strategic incentives inherent in bilateral oligopoly lead to a reduction in trade between firms relative to a competitive benchmark.
Bilateral oligopoly models, on the other hand, have been used extensively in the trade union literature to model the bargaining activity by unions aimed at extracting firms' rents, generated in the final market (see Pencavel, 1991, and Booth, 1995, for recent surveys).
In a business system, with interconnected and interdependent firms, it is quite possible that market power may arise at more than one "bloc" or "point." (2) For example, market power may be vertically connected, i.e., between trading parties as arising in a bilateral monopoly or bilateral oligopoly situation.
When you have a bilateral oligopoly you have an interesting market structure that we know very little about.
Measuring market power in bilateral oligopoly: The wholesale market for beef.
In the analysis of bilateral oligopoly, however, one would like to leave open the question of whether buyers or sellers (or both) behave competitively while allowing for the possible exercise of market power on either side.
In those areas, bilateral oligopoly, not price leadership or rigid prices, appears to prevail.
Problems arise when the market has only one buyer and one seller (bilateral monopoly) or only a few buyers and a few sellers (bilateral oligopoly).
These sellers invariably claim that large buyers, or buyer groups, take unfair advantage of their size to compel small suppliers to accept ever shrinking margins, forcing many of them to leave the market, setting the stage for bilateral oligopoly, raising rivals' costs and harming consumers in the process.

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