bargain_foc_vert_sim: Nash Product FOCs for use in vertical model with simultaneous...

In mergersim: Merger Simulation and Calibration

Nash Product FOCs for use in vertical model with simultaneous timing

Description

Nash Product FOCs for use in vertical model with simultaneous timing

Usage

bargain_foc_vert_sim(
  price_w,
  own_down,
  own_up,
  alpha,
  delta,
  cost_w,
  cost_r,
  lambda,
  price_r,
  sumFOC = TRUE
)

Arguments

price_w	Upstream or wholesale prices
own_down	Ownership matrix for downstream firms
own_up	Ownership matrix for upstream firms
alpha	Price coefficient
delta	Mean values
cost_w	Marginal costs for upstream firm for each product
cost_r	Marginal costs for downstream firm for each product
lambda	Bargaining power of the buyer/retailer
price_r	Retail prices starting values
sumFOC	logical; if true, returns the sum of first-order conditions, if false, returns vector of FOC's for each product

Details

This function calculate the first-order conditions from a Nash bargaining model. For use in a vertical supply chain with simultaneous timing

Value

The first-order conditions

Examples

bargain_foc_vert_sim(price_w = c(1.6, 1.6, 1.6, 1.6, 1.6, 1.6),
own_down = paste0("R",rep(c(1,2,3),each=2)),
own_up = paste0("W",rep(c(1,2),3)),
alpha = -0.9, delta = c(0.2, 0.3, 0.9, 1.0, 0.8, 0.9),
cost_w = rep(.2, times = 6),
cost_r = rep(.1, times = 6),
lambda = 0.5,
price_r = c(2.9, 2.9, 3.0, 3.0, 3.0, 3.0))

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