Bilateral monopoly

So most of the conclusions of the bilateral monopoly theory hold whether or not the bargaining parties are monopolists in the strict sense of the word.

Furthermore, whether or not the negotiation parties are monopolists in the strict sense of the term, most of the implications of the bilateral monopoly theory hold true.

As in the symmetric case, manufacturers and retailers choose higher social attention in a cooperative framework than in a non-cooperative one, and these choices fully resolve the problem of double marginalization.

The lack of alternatives within a given market gives way for vertical integration where the monopolist and monopsonist merge to control both upstream and downstream entities.

In this case, the bilateral monopoly quickly became a structure of vertical integration with Standard Oil being both the monopolist and monopsonist.

The buyer's actual value will be $2 half of the time, and no trade will take place, demonstrating the inefficiency of a single provider in comparison to several suppliers.

[8] The literature on bilateral monopoly has a long tradition in microeconomics, and the frequently cited double marginalization problem can be traced back to Spengler (1950).

Robinson was one of the prominent economists of the 20th century, and she made important contributions to the study of imperfectly competitive markets and monopoly theory.

In 1933, Joan Robinson coined the term "monopsony" in her book The Economics of Imperfect Competition to describe the buyer's monopsonistic power in resisting the seller.

The book made significant contributions to the economic theory of monopoly and imperfectly competitive markets.

This can be likened to the situation where two teams have a common interest in maintaining a good working relationship, but disagree over how to allocate limited resources to things each party deems important.

In cases where both parties' switching costs are unacceptably large, a bilateral monopoly model is commonly utilized.