THE DETERMINATE SOLUTION FOR BILATERAL MONOPOLY AND THE OPERATION OF CARTELS
Abstract
In a recent paper in this Journal, Z.A. Spindler has proposed a determinate solution for bilateral monopoly, taking issue with the conclusion of many microeconomics textbooks that both the equilibrium price and the equilibrium quantity are theoretically indeterminate. His analysis relates to what may be termed ‘pure’ bilateral monopoly — in which there is literally only one seller and only one buyer. In practice, however, bilateral monopoly situations frequently are characterised by the existence of some sort of cartel arrangement on one side or the other, if not on both. The purpose of this paper is to consider the circumstances under which Spindler's determinate solution applies to these more general formsof bilateral monopoly.
Citation
SMITH, B. (1975), "THE DETERMINATE SOLUTION FOR BILATERAL MONOPOLY AND THE OPERATION OF CARTELS", Journal of Economic Studies, Vol. 2 No. 2, pp. 152-158. https://doi.org/10.1108/eb008056
Publisher
:MCB UP Ltd
Copyright © 1975, MCB UP Limited