bargain_foc: Nash bargaining first-order conditions

In mergersim: Merger Simulation and Calibration

Nash bargaining first-order conditions

Description

Nash bargaining first-order conditions

Usage

bargain_foc(price, own, alpha, delta, cost, lambda, includeMUI = TRUE)

Arguments

price	Price
own	Ownership matrix
alpha	Price coefficient
delta	Mean values
cost	Marginal costs for each product
lambda	Bargaining power of the buyer
includeMUI	logical; whether to include marginal utility of income in buyer's payoff, thereby translating dollars to utility. Default is True, interpreted as buyer maximizing utility. Setting equal to False would have interpretation that buyer maximizes profits.

Details

This function calculate the first-order conditions from a Bertrand price-setting model of competition

Value

The first-order conditions

Examples

alpha  <- -0.9
delta <- c(.81,.93,.82)
c_j <- c(.05,.31,.30)
own_pre = diag(3)
p0 <- c_j*1.1

bertrand_foc(price = p0,
own = own_pre, alpha= alpha,
delta = delta, cost = c_j)

mergersim documentation built on July 21, 2026, 5:09 p.m.