This paper examines the output and profit effects of horizontal mergers between upstream firms in intermediate goods markets. We consider market settings in which the upstream firms sell differentiated products to, and negotiate nonlinear supply contracts with, a downstream retail monopolist. If...

Bargaining power affects the terms of trade negotiated between agents in the economy. When multiple players with interrelated payoffs negotiate contracts, the outcome of each negotiation depends on all the players' bargaining powers. In a model in which a buyer negotiates in sequence with two...