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THE EXPERIMENTAL COMPARATIVE ANALYSIS OF NEGOTIATION BEHAVIOURS CONDITIONED OF THE BILATERAL MONOPOLY WITH ELEMENTS OF PRICE LEADERSHIP

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Kalinowski S.

Studia Ekonomiczne (Economic Studies)

2005

issue 4(47)

365-384

The article was elaborated to verify the hypothesis on the behavior of subjects within the bilateral monopoly. According to this hypothesis, bargaining behavior under the conditions of bilateral monopoly with limited information leads to equal split of maximized joint profits when the participants of the same status can communicate. The thesis was based on the intuition that participants of the experiment, however aware of the competition, experience the positive results of the cooperative attitude of other wholesalers and rivalistic attitude of other retailers. Within each party the observation of the effectiveness of rivalistic attitude of retailers and cooperative attitude of wholesalers on the way to maximize joint profits should spread. The achievement of the research purpose was based on the method of economic experiment. The experiment was executed as a strategic game with the framework that came from the Bowley's model of bilateral monopoly with the elements of price leadership. The research was the repetition of the study by Fouraker, Siegel and Harnett. This experiment had been done comparatively with two groups: students and managers. In the current version of the research only one condition was changed. The subjects of the same status could communicate. Siegel and Harnett did not find any significant differences between equilibriums achieved by students and by managers, under conditions of limited information. The indication of stable solution proved mean price and quantity significantly close to the Bowley point. The current version of the study was also executed with two groups, to keep other factors equal. First was the group of students of the University of Economics in Poznan. The second was the group of sales managers of the company which has the network of electricity equipment wholesale stores. The experiment with the group of students brought the equilibrium that didn't differ significantly from the point that was in the middle between the Bowley point and the point of equal split of maximized joint profit. We can name that equilibrium as a stop 'half way' from the Bowley point to the negotiated Pareto optimal solution. The results achieved with the group of managers fully confirm presumed hypothesis. The equilibrium was significantly close to the point of equal split of maximized joint profits.

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1 Studia Ekonomiczne (Economic Studies)

1 Kalinowski S.

1 2005

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THE EXPERIMENTAL COMPARATIVE ANALYSIS OF NEGOTIATION BEHAVIOURS CONDITIONED OF THE BILATERAL MONOPOLY WITH ELEMENTS OF PRICE LEADERSHIP