Excessive entry in a bilateral oligopoly

In a bilateral oligopoly, Ghosh and Morita (‘Social desirability of freeentry: a bilateral oligopoly analysis, 2007, IJIO) show that entry is always sociallyinsufficient if the upstream agents have sufficiently strong bargaining power. Weshow that this conclusion is very much dependent on the use of “efficient bargaining”model in their analysis. Using a “right-to-manage” model, we show that, even if theupstream agents have full bargaining power, entry is excessive in a bilateral oligopolyif the cost of entry is not very high...