Schemat arbitrażowy Nasha, a podział zysków w bilateralnym monopolu kopalni węgla brunatnego i elektrowni. Cześć druga – zastosowania w negocjacjach strategicznych i taktycznych

Jurdziak, Leszek (2006): Schemat arbitrażowy Nasha, a podział zysków w bilateralnym monopolu kopalni węgla brunatnego i elektrowni. Cześć druga – zastosowania w negocjacjach strategicznych i taktycznych. Published in: Górnictwo Odkrywkowe (Opencast Mining) , Vol. XLIX, No. No.1-2 (January 2007): pp. 81-88.

Abstract

The application of Nash bargaining solution to profit division in negotiation between opencast lignite mine and power plant has been discussed. Different proposals of status quo point usage and ways of its determination for profit sharing both in strategic and tactical/operational negotiation have been presented. The novel approach is the creation of lignite price contours on the mine and power plant profit distribution chart. It shows the inherent contradiction between individual and group rationality in bilateral monopoly (BM) and the reduction of incentive to opportunism together with the increase of lignite price. The opportunism due to asymmetry of information and possession of dominant strategy of mine (optimization of ultimate pit) creates a real threat to cooperation between both sides of BM. The full confidence in joint profit maximization and full control of accepted profit sharing without increase of transactional costs is possible only in vertically integrated energy producer offering equal access to information for both sides. As it was shown in [4] such solution does not create any threat for energy market efficiency – on the contrary it can allow on better level of deposit recovery through excavation of the greater ultimate pit. The interesting proposal is the treatment of pit optimization as a real option of mine size change. Presented methods, tools and solutions should help both firms in real negotiation in finding their strategic positions and avoiding potential threats. But eventually from negotiating sides it depends if they will choose the cooperation or competition, rational arguments or rational threats, maximization of joint profits or only their own.

• Item Type: MPRA Paper
• Institution: Institute of Mining Engineering at Wroclaw University of Technology
• English Title: Nash bargaining solution and the split of profit in bilateral monopoly of lignite opencast mine and power plant. Part two – applications in strategic and tactical negotiations
• Language: Polish
• Keywords: bilateral monopoly; lignite price; price negotiation; bargaining; Nash bargaining solution; cooperative game; non-zero sum game; pit optimisation; Lerchs-Grossmann algorithm; vertical integration; Pareto efficiency; opportunism; asymmetry of information; ultimate pit; optimal pit; lignite mining; real option
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L72 - Mining, Extraction, and Refining: Other Nonrenewable Resources; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; D - Microeconomics > D4 - Market Structure, Pricing, and Design; L - Industrial Organization > L4 - Antitrust Issues and Policies > L44 - Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations; D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; L - Industrial Organization > L4 - Antitrust Issues and Policies > L42 - Vertical Restraints ; Resale Price Maintenance ; Quantity Discounts; C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory; L - Industrial Organization > L0 - General; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C71 - Cooperative Games; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L24 - Contracting Out ; Joint Ventures ; Technology Licensing; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships ; Contracts and Reputation ; Networks; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L94 - Electric Utilities; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets

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