REVISION OF INDUSTRIAL SUPPLY CONDITIONS AND GAME-THEORY

We analyze the real case of two firms evaluating a shift from a ''risk and revenue sharing agreement'' to a supplying agreement. From the po int of view of economic theory, this is a constrained bilateral monopo ly problem. At the first stage, the two firms take sequential decision s of price and demand, with price being represented not only as a simp le level, but also as a more realistic price schedule. In this more ge neral case we solve a variational problem by transforming it - with no restrictions - into a classical mathematical programming one. At the second stage, the two firms an allowed to bargain over a couple price- quantity instead of taking separate decisions about them. As expected, bargaining is efficient with respect to the constant price case. In t he price schedule case however efficiency does not hold without furthe r conditions.