Bilateral monopoly

A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).[1]

Overview[]

Bilateral monopoly situations are typically analyzed using the theory of Nash bargaining games, and market price and output will be determined by forces like bargaining power of both buyer and seller, with a final price settling in between the two sides' points of maximum profit.[2] A bilateral monopoly model is often used in situations where the switching costs of both sides are prohibitively high.

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References[]

  1. ^ Mark Hirschey, Fundamentals of Managerial Economics, Cengage Learning, 2008, pp. 474
  2. ^ "DEFINITION of 'Bilateral Monopoly'". Investopedia. investopedia.com. Retrieved 28 January 2016.